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Depreciation Formula:
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Car depreciation by miles calculates how much value a vehicle loses based on the distance it has been driven. This method recognizes that mileage is a significant factor in determining a car's resale value and overall worth over time.
The calculator uses a simple depreciation formula:
Where:
Explanation: The calculation multiplies the total miles driven by the depreciation rate per mile to determine the total monetary value lost.
Details: Understanding mileage-based depreciation helps car owners estimate their vehicle's current value, make informed decisions about when to sell, and calculate the true cost of ownership including wear and tear.
Tips: Enter the total miles driven and the depreciation rate per mile. Both values must be non-negative numbers. The calculator will output the total depreciation amount in dollars.
Q1: How is depreciation per mile determined?
A: Depreciation per mile varies by vehicle make, model, age, and market conditions. It's typically calculated by dividing total expected depreciation by expected mileage over the vehicle's lifespan.
Q2: Does this calculation include other depreciation factors?
A: No, this calculation only accounts for mileage-based depreciation. Actual vehicle depreciation also includes age, condition, market demand, and economic factors.
Q3: What's a typical depreciation rate per mile?
A: Rates vary significantly but generally range from $0.08 to $0.30 per mile for most passenger vehicles, depending on the car's initial value and expected lifespan.
Q4: How accurate is mileage-based depreciation?
A: While mileage is a major factor in depreciation, it's not the only one. This calculation provides an estimate but may not reflect the exact market value of a specific vehicle.
Q5: Can I use this for business vehicle calculations?
A: Yes, mileage-based depreciation is commonly used for business vehicles, though tax regulations may require specific calculation methods for deductions.