How do I Compare the Depreciation in the Value of Cars?

Cars depreciate over time.

Many professionals attempt to offer an educated guess of future vehicle values. Edmunds, an informational website, offers a ratings chart to help determine future or past values. A used car appraisal guide offers accurate figures of current depreciation values, although future values are not as accurate because of the ever-changing market. For example, if gas prices rise significantly, SUV sales go down and so does value. The most accurate information you can find is the present value in comparison to original MSRP (Manufacturer's Suggested Retail Price).

Instructions

Future or Past Depreciation

1. Use the Edmunds True Cost to Own tool to determine present and future depreciation values (see Resources). From the web page, choose whether you want to view new or used car values. Input the vehicle's year, make, model, trim level and zip code to continue.

2. Review depreciation costs for the five-year period. Keep in mind that the depreciation values are based off the vehicle's original MSRP. The taxes and fees assessment are based on the zip code you provided but may be slightly different for your particular situation if you had a trade-in at time of purchase (this reduces the tax amount).

3. Note financing charges. If you purchased a vehicle brand new, the interest you paid in addition to the price of the vehicle is part of your costs, but if you are not trying to figure out values on your own cars, disregard this information. Review additional costs if you want, which include maintenance, repairs and full costs, to determine averages for vehicle maintenance if you wish to use the information for your comparisons.

4. Repeat the steps to get depreciation values for other cars you want to compare. Print the information or write it down to compare side by side.

Present Depreciation Values

1. Get the original MSRP value of the vehicles that you want to compare. Go to MSN Auto's website (see Resources). Choose from the new or used option from the menu, and pick your desired make and model.

2. Choose the "Prices" option from the menu on the results page, or click on the "MSRP Price Range" link from the top of the page next to the vehicle's picture. All models are listed for the vehicle year. Write down the MSRP amount and add the destination charge to conclude the accurate MSRP (destination fees are included in the price at the time of purchase).

3. Use the "Price with Options" link below the menu to determine prices if the vehicle has extra options or packages. Write down or print off your MSRP results before you continue to review present values. Go to an appraisal website. You can stay on the MSN Autos web page to do so, but for a better idea of current values, check several different appraisal guides, such as those provided by Edmunds or Kelly Blue Book (see Resources). All guides offer different values. Figure your value based on a median number.

4. Choose "Used Car Values" from any of the appraisal websites (even if you are checking a new car, you can review the immediate depreciation based on trade values). Choose the vehicle's year, make, model, color options and input the accurate mileage to get results.

5. Do not check the retail-value option when determining depreciation values. Use the trade or private-sale values, although a trade-in value reflects wholesale pricing, which dealers and auctions use. Use the appraisal guide values for each car you want to compare.

6. Subtract the present value from the original MSRP for all vehicles you want to compare. Use the difference to compare the depreciation values. Make sure that you consider the age of the car. Do not compare a five-year-old car to one than is only three years old.

Tips & Warnings

• Vehicles that have mechanical or body problems are worth less money. Consider condition, number of owners and maintenance history when figuring depreciation values. For example, a one-owner vehicle is worth more than a car that was originally a rental. Or, a car with a check engine light on in the dash is not worth as much as a car that needs no mechanical repairs.

Resources

• Edmunds: Truse Cost to Own
• Edmunds: Used Car Appraiser
• MSN Autos: Passenger Car Research Center
• Kelley Blue Book: Used Cars