New cars lose 20% in year one and 15% in year two — that's
After 5 years, most cars are worth 40–50% of their original price.
Use this calculator before making any financial commitment that depends on this type of calculation. Running the numbers in advance lets you evaluate options without the pressure of a live negotiation or decision deadline.
The most consequential mistake is comparing financial figures that are not on the same basis — gross versus net, before-tax versus after-tax, or nominal versus inflation-adjusted. Always check whether figures you are comparing use the same definition.
A small business owner compares two financing options for new equipment: a 5-year bank loan at 5.2% versus a leasing arrangement with a monthly fee. The calculator translates both into a total cost figure, making the comparison straightforward.
Year 1: 20%. Years 2-3: ~15%/yr. Years 4-5: ~10-12%/yr. After 5 years: ~40-50% of original value.
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