The moment you sign a purchase agreement and drive a vehicle off the lot, it begins losing value. Since the vehicle is considered “used” as soon as you get behind the wheel, it can never be sold as a new again. Understanding how vehicles depreciate and how to calculate vehicle depreciation can play a key role in calculating how much your vehicle is worth when you’re creating a plan for trading in or selling your car.
How Much Does a Vehicle Depreciate Per Year?
While the answer to that question can largely depend on what kind of condition you keep your vehicle in, there are some ways to get a ballpark idea of a vehicle’s depreciation. Obviously, if you don’t maintain the vehicle through regular service visits or you are involved in accidents, depreciation will speed up considerably. However, there are some general principles of vehicle depreciation that are the same across the board.
First of all, most vehicles depreciate by roughly 20% within the first year of ownership. Hypothetically, let’s assume that you bought a vehicle for $30,000. At the beginning of your 13th month of ownership, it’s probably worth around $24,000. As the vehicle ages, depreciation speeds up. By the end of the fifth year, your vehicle could have lost as much as 60% of its original value, making it worth only $12,000.
How Do You Calculate Vehicle Depreciation?
There are several factors that go into a vehicle’s depreciation, including:
- Make and Model: Some brands of vehicles hold their value for longer than others. For instance, Jeep and Toyota make up five of the top 10 vehicles in regard to maintaining their value.
- Mileage: A vehicle that is driven a lot and has more miles on its odometer depreciates faster than a vehicle that rarely gets driven.
- Overall Vehicle Condition: If the body and engine are both showing significant signs of wear, the vehicle is worth less than another vehicle in better shape.
As a general rule, you can use a simple formula in order to get a ballpark idea of a vehicle’s value after depreciation.
Value of Car After n Years = Purchase Amount * (1 - Percentage Rate of Depreciation Per Year/100)n
Depreciation Amount = Purchase Amount - Value of Car After n Years
Frequently Asked Questions
Honest Answers to Your Car Shipping Questions
Yes, we always ask for your specific pickup and delivery addresses, if the carrier can get right to the addresses you provide, they will. If the addresses that you give us are not safely accessible for a Multi-car carrier, however, you will need to make arrangements with the driver to meet at a nearby location where the carrier can safely get in and out.
People do it all the time (rarely for free) but the official answer is no.
Not what you wanted to hear, we know, but that is the honest answer.
We are not licensed to broker the shipment of household goods and, likewise, no car carrier that operates in the USA is licensed to transport them from state to state either. Despite what you might be being told by other car shipping companies you may speak with.
Remember, at the end of the day we're all salespeople, and the true answer to this question is not a great selling point.
You will hear a lot of companies tell you that you can put up to 100 pounds of items in the trunk, but that is not entirely true. That fact is that items of that amount are fairly common and the department of transportation is probably not going to split hairs and fine the trucker over items of that amount, provided they are not over their weight limit. They could fine them, however, if they see a vehicle stuffed full of personal items so the car carrier will most likely try to negotiate something with you to cover themselves against any costs they could incur. It's not something we can build into your contract though.
We have a short and helpful video on this topic in our user videos.
Only in rare cases and car carriers will usually charge a premium to make it happen.
All dates given by car carriers are typically estimates and projections.
For this reason (and to keep your cost down) we ask that you build in some flexibility and give us the earliest possible date you would be WILLING to release the vehicle, even though it may not be your preferred date.
We'll put you in direct contact with your car carrier and the driver will also typically call you the afternoon or evening before your pick up and delivery (they won't just show up unannounced, and if they do we want to hear about it). However, car carriers are out on the road battling traffic, weather and any number of other factors that can and do throw them off of their pickup and delivery projections from time to time.
If the projected dates we give you come and you are unable to make contact with your carrier, please call our office immediately so that we may help resolve the situation.
The average transit time from pick up to delivery on any vehicle going coast to coast will average 7 to 10 days. From there you can figure your transit time based on how far your vehicle is traveling, i.e. from either coast to the Midwest might average 3-7 days.
Even better, we do not even ask for payment until we have you confirmed for pickup by a safe, reliable, fully insured, direct car carrier. If for any reason you do not ship your car with the carrier that we arrange for you, there is no fee.
The fees paid directly to the carrier however, (in most cases, their fees are not paid until your vehicle is delivered) are not directly controlled by us, so any requests for a refund of the carrier's portion would need to be addressed with the carrier directly.
Of course! And you are always backed by our Damage Free Guarantee policy.
Part of what you pay us for is to verify that the car carrier that we put you on is covered by the proper amount of insurance and that everything is up to date.
There is never any additional cost to you for this coverage, and their insurance is always primary.