Vehicle depreciation versus loan balance: a scenario, not an appraisal

Track value and debt separately, then inspect when equity becomes positive or negative.

Use one starting point

Enter the vehicle value and loan principal from the same point in time. The next 12 months use your first loss assumption, whether the car is new or already used. Later months use the second annual rate.

Know the interpolation

With 20% loss over the first year, a 30,000 starting value is 24,000 at month 12. A later 10% annual loss makes month 24 equal 21,600. Monthly values follow geometric interpolation, not a straight-line tax depreciation schedule.

A crossing can reverse

Value can fall faster than debt early in the loan. The first non-negative observation may occur at month zero and then reverse. The table also reports the first recovery after negative equity and shows every month through your horizon.

Use several entered assumptions

Defaults are illustrative. The tool does not infer resale from the model, mileage, condition or market. A floor is your constraint, not a guaranteed bid. Enter a conservative net sale value separately when comparing ownership with a lease return.

Explore the value and debt timeline or test the same exit in lease versus buy.