# Appliance Depreciation Calculator

The appliance depreciation calculator estimates the **actual cash value of any home appliances** that you own. Whether you are thinking about replacing your old appliances like a washing machine or dealing with a **home insurance policy that offers replacement cash value or actual cash value**, this calculator has got you covered!

The following article will **explain the difference between replacement cost and actual cash value**. There's also an **appliance depreciation table at the end** to give you an idea of how much appliances depreciate each year. Not just for appliances, you can also use this tool to estimate the depreciation cost of other things, like the roof of your house or a window. You can start with entering some numbers in the calculator or continue reading to understand appliance depreciation and how do you calculate depreciation.

## What is appliance depreciation?

The devices or appliances we own get older as time passes. With regular usage of said appliances, there's **wear and tear that causes damage** to it, and the **value of our devices reduces**. This **reduction in the value of the appliances is appliance depreciation**.

The appliance depreciation has four components:

**Depreciation rate (DR)**—**Rate**at which the value of appliance is getting**depreciated**;**Age of item**— Number of**years in use or since purchase**;**Actual cash value (ACV)**—**Current valuation**or the replacement cash value minus the depreciated value of the appliance; and**Replacement cash value (RCV)**—**Amount it would take to replace**the appliance at present.

The depreciation formula is:

While buying insurance cover for your home appliances or personal property, please read the terms and conditions for these terms. It is often the case that the **insurance provider only pays the actual cash value** of the objects rather than the replacement cash value. There are also different policy types based on the above parameters.

**Policy document**

Please read your policy declarations carefully to check if it **covers the replacement cash value** to receive maximum benefits in any accidents, thefts, or other unpleasant circumstances. Also, look for additional factors like deductibles and limits.

## Actual cash value vs replacement value 🤔

The policy that covers **replacement cash value will pay you the value of goods without any deduction** for depreciation, i.e., the insurer will likely reimburse you a larger sum that you can use to buy yourself the covered personal property directly. However, if the policy covers the **actual cash value**, the money you'll receive upon claims is the **present value of the appliance considering the depreciation**. You may have to make the **out-of-pocket expense** to cover the rest of the cost to replace the device.

## How to calculate depreciation on appliances

You can calculate the appliance depreciation using the above equation. Follow the steps below:

**Select the appliance**from the list or enter the**depreciation rate**directly.- Fill in the
**age of the item**. - Insert the
**replacement cash value**. - The appliance depreciation calculator will return the appliance's
**actual cash value**.

## Example: Using the appliance depreciation calculator

Find the actual cash value for a 4-year old space heater presently available for `$75`

.

To find the depreciation cost for a space heater:

**Select the appliance**from the list as`space heater`

.- Fill in the
**age of the item**as`4`

years. - Insert the
**replacement cash value**as`$75`

. - The
**actual cash value**is:

## Appliance depreciation table

The table below has the depreciation rate of most of the appliances:

Appliance | Rate | Appliance | Rate |
---|---|---|---|

Built-in wine cooler | 7.14 | Refrigerator | 12.50 |

Central air conditioning | 7.00 | Refrigerator - regular | 6.67 |

Dehumidifier | 10.00 | Sewing machine | 5.00 |

Dishwasher | 12.50 | Space heater | 6.67 |

Electric dryer | 8.33 | Stoves, ranges – electric | 5.88 |

Electric floor polisher | 6.67 | Sump pumps | 10.00 |

Freezer | 5.00 | Tankless water heater | 5.00 |

Garbage disposal | 10.00 | Trash compactor | 10.00 |

Gas charbroiler | 5.56 | Vaccum cleaner (large) | 16.67 |

Gas dryer | 7.69 | Vacuum cleaner (small) | 10.00 |

Gas stove | 5.26 | Washer | 12.50 |

Hand dryer | 9.09 | Washer-dryer | 12.50 |

Ironers | 10.00 | Water heater | 10.00 |

Microwave oven | 10.00 | Water pumps | 10.00 |

Range hood | 7.14 |

🙋 You can protect your appliances and wiring using an appropriately sized circuit breaker. Don't know how? Check our **breaker size calculator** to learn more about it!

## FAQ

### How do you calculate depreciation on appliances?

To calculate depreciation on appliances:

**Multiply**the**age of the appliance**by the**replacement cash value**.**Multiply**this product with the**depreciation rate**to obtain the depreciated value of appliances.**Subtract**the**depreciation value**from the**replacement cash value**to find out the actual cash value of the appliance.

### What is the difference between replacement cost and actual cash value?

The replacement cash value is the **current cost of the product in the market**, i.e., the **cost required to replace the item you own with a new one** at present. The actual cash value is the **value of an appliance after considering depreciation** due to wear and tear. The actual cash value is the **difference between the replacement cost and the depreciation cost**.

### What do you mean by depreciation rate?

The depreciation rate tells you **how much the appliance depreciate each year**. It is the set percentage value or **rate at which an item loses its value**. For instance, the depreciation rate of a `$50`

water heater is `10%`

. Every year the water heater would lose `10%`

of `$50`

= `$5`

in its value. This value is known as the actual cash value of the appliance.

### What are the factors affecting actual cash value of an appliance?

The actual cash value of an appliance primarily depends upon the **depreciation rate** – the **rate** at which the value of the appliance is getting **depreciated** – and the **age of item**, which is the number of **years in use or since the purchase made**.