Ownership costs
How vehicle depreciation affects ownership cost
The price paid for a car is not necessarily its final ownership cost. Resale value determines how much of that purchase price is retained.
Use purchase minus resale
A car bought for 30,000 and sold for 18,000 has lost 12,000 in value. Spread over five years, that averages 2,400 per year, but it does not imply the loss happens evenly each year. Actual resale depends on the vehicle, market, age, condition and mileage.
Avoid counting depreciation twice
If your cost model already adds the full purchase price and later subtracts resale, depreciation is already included. Adding a separate depreciation charge would count the value loss twice. Our ownership tools use purchase plus operating costs minus entered end-of-period resale.
Test more than one resale outcome
Suppose two cars differ by only 1,000 in five-year net cost. A 2,000 error in one resale estimate could reverse the ranking. Try conservative and optimistic resale values grounded in relevant market information. The site does not supply invented depreciation percentages or model-specific resale forecasts.
Method and references
Examples use nominal geometry and fixed-price scenarios, with no vehicle-specific specifications implied. See our calculation methodology and editorial policy.
Unit reference: NIST Guide to the SI: conversion factors. Financial examples are arithmetic illustrations, not market-price forecasts.