How to Calculate Car Depreciation Value

Calculating the depreciation value of a vehicle is a useful tool when shopping for a car, or when preparing to sell a vehicle you currently own. Depreciation values will give you an accurate estimate of what a vehicle will be worth several years down the road--or what it is worth now, if you have owned it for a few years. Depreciation ratings of different vehicles can vary tremendously, depending on the make and model, as well as optional equipment and mileage.

Difficulty: Easy

Instructions

Things You'll Need:

• Calculator
• Vehicle VIN (Vehicle Identification Number)

1. Determine the residual percentage of the vehicle you need to calculate depreciation of. Residual percentages can be accessed online at a variety of sources (see Resources).

2. Find the original MSRP of the vehicle. If you have the original window sticker, this information will be at the bottom right-hand corner. If you do not have the window sticker, you can call a dealer that sells the brand of vehicle and ask them to look it up. It is recommended to contact a dealer and give them the specific VIN (this 17 digit number be found on the vehicle at the lower part of the driver's side windshield). The Internet has approximate MSRP ranges available, but the vehicle may have been built with additional equipment.

3. Multiply the residual percentage by the original MSRP. This will be the vehicle's depreciated value. An example would be an MSRP of $20,000 and a two year residual of 66 percent. The two year depreciation value would be $13,200.

Tips & Warnings

• If you have difficulty reading the VIN from the lower part of the windshield, check the side of the door panel that is visible with the door open. The VIN is usually located here as well.
• When determining your residual percentage, make sure you are using the correct number of years for the age of the vehicle.

References

• Depreciation Value Information

Resources

• Residual Percentages