# How do you calculate depreciation on a vehicle?

**The formula for calculating depreciation is shown below.**

- Annual
**Depreciation**= (Total Cost of**Vehicle**– Sale Value of**Vehicle**) / Number of Years in Service. - (S$ 10,000 – S$ 2,000) / 10 years = $800 annual
**depreciation**. - Annual
**Depreciation**= (Total Cost of**Vehicle**– Sale Value of**Vehicle**) / Number of Years in Service.

In this regard, how do you calculate depreciation on a car?

The **formula** is **cost** minus the salvage value divided by the estimated useful life. If you have a **car** that was bought for $20,000 and the salvage estimate is $10,000, you are left with a $10,000 figure. Divide this by the 6 years you own the **vehicle** and you are left with approximately $1,700 of **depreciation** each year.

**depreciation**, though, your

**formula**is (2 x straight-line

**depreciation**rate) x Book value of the asset at the beginning of the year. The straight line

**depreciation**rate is the percentage of the asset's cost minus salvage value that you are paying; here that is $20,000 out of $200,000, or 10%.

Likewise, how much does a car depreciate per year?

Your **car's** value decreases around 20% to 30% by the end of the first **year**. From **years** two to six, **depreciation** ranges from 15% to 18% **per year**, according to recent data from Black Book, which tracks used-**car** pricing. As a rule of thumb, in five **years**, **cars** lose 60% or more of their initial value.

While different **cars depreciate** at different rates, it's a good rule of thumb to assume that a new **car** will lose approximately 20 percent of its value in the first year and 15 percent each year after that until, after 10 years, it's worth around 10 percent of what it originally cost.