Definition
Depreciation
Depreciation is the fall in the value of an asset over time. A new car typically loses a large share of its value in the first year and continues to fall afterwards.
It is a real cost of ownership even though it never appears as a monthly payment, which is why a car can look affordable on its instalment alone and still be expensive to own.
Tools that use this term
Car Affordability Calculator
The full monthly cost of a car, and whether it fits inside your budget.
Car Depreciation Calculator
What a car loses in value each year, and what that costs per month.
Total Cost of Ownership Calculator
Everything a car costs: depreciation, finance, fuel, insurance, tax, servicing and repairs.
ROI Calculator
Return on investment: profit, ROI percentage and how long the money is tied up.