What Is Depreciation On A Car?

calculating finances

Depreciation is the natural loss of value in an asset over time, but what exactly is depreciation on a car, and what factors go into the calculation? The first thing you should know is that depreciation occurs automatically as your vehicle is driven through Scranton or Dunmore.

Although proper care can go a long way towards protecting your vehicle’s value, normal wear and tear, accumulated mileage, and the gradual wearing-out of features will all play a role in the calculation of depreciation.


How is Depreciation Calculated?

Depreciation is determined by a range of different factors, which can vary depending on the type of asset under consideration. How is depreciation calculated on a car? Here’s what you should know:

  • Vehicles don’t depreciate at the same rate year after year. Many will lose up to 20% of their value within the first year, and about 60% of their full value within the first five.
  • Many vehicles are sold with an estimation of how much residual value they’ll maintain after a certain number of years. Reliability scores and brand history both play a role, so you should always choose a model that’s expected to hold up well.
  • Cars that aren’t well maintained will depreciate more quickly, and cars that accumulate more wear might depreciate to a greater extent within a shorter period of time.

Talk to the experts on our financing team if you’d like to get a better sense of how depreciation will impact your purchase.

Don’t Let Depreciation Get You Down

One of the best ways to lower your vehicle’s cost-to-own is to choose to buy used! A certified pre-owned vehicle with one year of driving history is often a great deal, because it will feel like new, and a large amount of depreciation has already occurred. 

Although depreciation can often be especially steep in the luxury market, INFINITI vehicles tend to hold their value well as the years go by! Compare the INFINITI CPO program to the programs of top competitors to get a better sense of why that’s true.

Find Your New or Used Vehicle at Bennett INFINITI of Wilkes-Barre

Even if you choose to buy new, it’s easy to save with Bennett INFINITI of Wilkes-Barre. Explore our new vehicle specials and our discounted pre-owned models today, and start cruising the Hazleton and Wilkes-Barre roads with a smile.

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Bennett INFINITI of Wilkes-Barre 40.5731, -75.48009.