RightFiguresAn entered decline, year by year
This page repeats one annual percent on a starting value. Each year’s decline is that year’s value times the percent, rounded half up to the cent. The decline cannot be larger than the value. The next year starts from the reduced cents. It is not an unrounded compound formula that is rounded once at the end.
Value lost is the starting value minus the ending value. Both are cents, so the difference is exact.
A 0% decline leaves the value unchanged. A 100% decline can take the value to $0.00 in the first year. The percent is the one you type. It is not a forecast of the car’s market value, and this page does not look up a make, a model or a mileage curve.
Not a tax deduction, and not a lease residual
Publication 946 describes MACRS and section 179 for business or income-producing property. This page does not apply those tables, conventions or listed-property rules. It is not a deduction.
Financing or leasing a car describes a lease payment as covering expected depreciation plus other charges. The residual on the lease versus buy calculator stays an amount you enter. This page does not produce that residual, and it does not use a money factor.
$30,000 declining 15% for five years
| Year | Decline | Value at year-end |
|---|---|---|
| 1 | $4,500.00 | $25,500.00 |
| 2 | $3,825.00 | $21,675.00 |
| 3 | $3,251.25 | $18,423.75 |
| 4 | $2,763.56 | $15,660.19 |
| 5 | $2,349.03 | $13,311.16 |
The value lost is $16,688.84. A later year can lose a different number of cents because it starts from the rounded remainder. 33.333333% is a six-decimal input. It is not an exact one-third.
The ending value is not what a buyer will pay. A loan payment on a price you already know is on the car loan calculator.
Sources & review
- Publication 946, How to Depreciate Property — Internal Revenue Service
- Financing or leasing a car — Federal Trade Commission
- Auto loans — Consumer Financial Protection Bureau
Last reviewed: . The formula is reproduced above so you can check the math independently.
Educational schedule only. It is not a market quote or a tax deduction.