Car Depreciation Calculator
Project a vehicle's future resale value and the total amount it loses to depreciation, year by year.
How to use the Car Depreciation Calculator
- Enter the purchase price.
- Enter the years of ownership.
- Enter the first-year depreciation – New cars commonly lose 15–25% in year one; use the later-year rate for a used car.
- Enter the depreciation each later year.
- Press Calculate. The result updates automatically as you type.
About the Car Depreciation Calculator
Depreciation is usually the largest cost of owning a newer car, often more than fuel, insurance or repairs. A new vehicle loses value fastest in its first year, then more slowly as it ages. This calculator uses a declining-balance model: each year the car loses a percentage of whatever it was worth at the start of that year.
Trucks and some popular SUVs and compact cars tend to hold value better than luxury sedans and many electric vehicles, which can drop 25–35% in the first year. High mileage (above about 12,000–15,000 miles a year), accident history and poor condition speed up depreciation. Buying a two- or three-year-old car lets the first owner absorb the steepest part of the curve.
Formula
Value after year 1 = Price × (1 − r₁)
Value after n years = Price × (1 − r₁) × (1 − r₂)n−1
r₁ is the first-year rate and r₂ the yearly rate after that, as decimals. Example: $35,000 × 0.80 × 0.85⁴ ≈ $14,617 after five years.
Example calculation
Using the default values:
- Purchase price = $35000
- Years of ownership = 5 years
- First-year depreciation = 20%
- Depreciation each later year = 15%
the calculator returns:
- Estimated value at the end: $14,616.18
- Total depreciation: $20,383.83
- Value lost: 58.2%
- Average cost per year: $4,076.77
Frequently asked questions
How much does a new car depreciate in 5 years?
Typically 45–60% of the purchase price. With 20% in year one and 15% after, a car keeps about 42% of its value after five years.
Which cars hold their value best?
Full-size pickups, certain off-road SUVs and reliable compact cars tend to retain value best. Luxury sedans often depreciate the fastest.
Does mileage affect depreciation?
Yes. Cars driven well above average mileage are worth noticeably less, while low-mileage examples in good condition command a premium.
Last updated: · Category: Automotive calculators