Depreciation Calculator
Find the true cost of owning an asset — depreciation loss, loan payments, insurance and one-time costs, per year and per month.
One-Time Costs
Yearly Breakdown
| Year | Asset Value | Deprec. | Loan | Insurance | One-time | Year Total |
|---|---|---|---|---|---|---|
| Year 1 | 316,667 | 83,333 | 96,000 | 18,000 | 6,667 | 204,000 |
| Year 2 | 233,333 | 83,333 | 96,000 | 18,000 | 6,667 | 204,000 |
| Year 3 | 150,000 | 83,333 | 96,000 | 18,000 | 6,667 | 204,000 |
What is asset depreciation?
Depreciation is the decrease in value of an asset over time due to use, wear, age, or obsolescence. A car that costs $40,000 today might be worth only $15,000 three years later — it has depreciated by $25,000. Understanding depreciation is essential for making informed purchase decisions, planning business finances, and calculating true ownership costs.
For businesses, depreciation is also an accounting concept — the cost of a long-lived asset is spread over its useful life as an expense. This reflects the economic reality that assets are consumed gradually, not all at once. For individuals, depreciation helps answer practical questions like "how much does it really cost to own this car per year?"
How depreciation is calculated
This calculator uses straight-line depreciation: the difference between the purchase price and the expected resale value, divided by the ownership period. It then adds ongoing costs like insurance and loan payments, plus one-time expenses like repairs and upgrades, to compute the true total cost of ownership per year and per month.
How to use this tool
Enter the asset's purchase price, expected resale value, and ownership period. Add any ongoing costs (insurance premiums, loan payments) and one-time costs (repairs, tires, accessories). The calculator shows the total depreciation, total cost of ownership, and the cost broken down by year and month.
Car depreciation facts
New cars depreciate fastest in the first year — losing 15–25% of their value. By year five, most cars have lost 50–60% of their original price. Luxury and sports cars often depreciate faster than economy cars. Buying a 2–3 year old used car lets you avoid the steepest depreciation while still getting a relatively new vehicle with manufacturer warranty remaining.
Reducing depreciation costs
Choose vehicles and assets with strong resale values. Keep detailed maintenance records — documented service history significantly improves resale value. Low mileage, popular colors, and in-demand features all help maintain value. For business assets, consult a tax professional about depreciation deductions that can offset the cost.
Frequently asked questions
Why include insurance and repairs in depreciation calculation?
Pure depreciation is only the loss in asset value. However, to understand the true cost of ownership, you need to include all expenses: depreciation plus insurance, maintenance, repairs, fuel, and financing costs. This calculator combines these into a single total-cost-of-ownership figure that is more useful for decision-making.
Do all assets depreciate?
Most physical assets depreciate over time due to wear, aging, and technological obsolescence. However, some assets can appreciate (increase in value) — real estate, collectible cars, art, and antiques may gain value. Land generally appreciates, while buildings and equipment depreciate.