Check the Future Value of Car
It is a well-known fact that the ones we buy a car, its value starts to drop significantly and depreciates every forthcoming year. To calculate or check the future value of your car, you can either use a car depreciation calculator or assess the used car value online. A depreciation calculator helps you know how much your car is worth and also helps you find out if the cost of the used car that has been offered is fair enough to accept the deal or should be considered for sale in times to come or no sale at all.
How does the car’s value drop?
- The moment the car is driven out of the showroom, there is a 10% drop in the car’s value.
- Certainly, the value of the car drops every year and within 5 years the value drops to 40% of the initial value.
Methods to calculate the future value of the car
Primarily, there are two methods in which we can calculate the future value of the car
- Straight-Line Depreciation
In this technique, the depreciation of the vehicle can be determined by subtracting the expected salvage value from the initial price of the car. Nonetheless, the salvage value of the car is the worth that would be gotten if the insurance agency offered it to a salvage yard for its parts and frames.
- Depreciation based on the car’s age
It depends on the cost of the car, current age, and its yearly depreciation rate. The ages and the cost are known qualities, the yearly depreciation rates fluctuate generally among models and make. In light of the exploration, new cars devalue by 24% in the first place year and 15% in the expected years. In this way, as years pass, the estimation of a vehicle decreases normally whether you drive it or not.
As there are a few unknown factors that become possibly the most important factor while assessing the depreciation cost, you can decide the size of the expense when you exchange, sell, or scrap your vehicle. This will assist you in knowing how much the vehicle dropped in an incentive since the time you got it.