Why depreciation is the real cost of a car

Ask someone what their car costs and they’ll tell you the payment or the gas bill. Almost no one names the biggest cost of all: depreciation — the value the car quietly loses just by existing. Over five years it usually beats fuel, insurance, and maintenance combined.

How it works

Most cars lose value fastest in year one — often 20% or more — then the curve flattens. A $32,000 car worth $19,000 after five years cost you $13,000 in depreciation alone, whether or not you ever felt it as a payment. The depreciation calculator projects the curve for any rate.

How to lose less of it

Keep mileage moderate, maintain the car with records, avoid accidents, and choose a model and color that resell easily. Trucks and value-holding brands depreciate slowly; trendy or soon-to-be-redesigned models drop fast. Fold the number into the full picture with the cost of ownership calculator.