Free car depreciation calculator. Enter purchase price, yearly depreciation rate and years to estimate what your car is worth now.
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Enter your purchase price, pick a yearly depreciation rate and set how many years you have owned the car. The calculator applies the declining balance depreciation formula, so each year the car loses the same percentage of its remaining value, not a fixed dollar amount. That is why the car depreciation curve is steep in the first year and flattens later. The result shows the estimated current value, which is a guide to the car resale value, plus the total depreciation since purchase. Use it to compare a new car with a used car, to plan when to sell, and to see how much value a car loses in 5 years under different rates.
This calculator uses the declining balance depreciation formula: current value equals purchase price times (1 minus rate divided by 100) to the power of years. Each year, the loss is a percentage of the value left at the start of that year. For example, a $20,000 car at 15 percent per year is worth $17,000 after one year, because 15 percent of $20,000 is $3,000. In the second year it loses 15 percent of $17,000, which is $2,550, so it is worth $14,450. That falling dollar loss is exactly what the declining balance method captures, and it matches how used car prices behave in real life.
First, choose your currency, then enter the purchase price you paid or plan to pay. Next, enter the yearly depreciation rate: 15 percent is a sensible average for a mainstream car, 10 to 12 percent suits a slow depreciating model, and 20 to 25 percent suits a luxury car or a fast depreciating model. Finally, enter the years owned, from 1 to 20, and read the estimated current value and the total depreciation. Try a lower rate to see what a car that holds value well would be worth, and a higher rate to see the worst case.
The car depreciation curve is steep at first and gentle later. A typical new car loses about 20 percent in the first year and roughly 60 percent within five years, leaving it worth about 40 percent of its original price. The vehicle depreciation rate by year therefore matters more than any single average: year 1 takes the biggest slice, years 2 to 5 each take a smaller dollar amount, and after year 5 the yearly loss slows further. If you plan to sell soon, the curve tells you how much of the steep early drop is still ahead of you, and if you plan to keep the car for ten years, it shows why the later years cost far less in lost value.
Mileage is one of the biggest factors affecting car depreciation: a high mileage car of the same age usually sells for less, because buyers expect more wear and more repair bills. Condition and a full service history help, while accident damage and missing records hurt. Brand reputation matters too, since reliable brands attract more used buyers. Color plays a smaller role, with neutral colors such as white, black, silver and grey appealing to more buyers than bright or unusual colors. Fuel efficiency, market demand for that body style, and new model launches also move prices, which is why two cars with the same age can depreciate at very different rates.
Not every vehicle depreciates at the same speed. Economy cars and trucks often hold value better than average, keeping about 45 to 60 percent of their value after five years. Midsize sedans sit near the average, at about 40 to 45 percent retained after five years. Luxury vehicles depreciate faster, often keeping only 30 to 40 percent after five years, because the new car premium fades fast and running costs are high. Electric vehicle depreciation varies widely: rapid battery improvements and changing incentives have pushed some electric cars down faster, while high demand models have held up well. Sports cars sit in the middle unless they are limited production models, which can even hold steady.
The new vs used car depreciation comparison usually favours buying used. A car that is 2 to 3 years old has already taken the steepest first year drop, so you pay far less and lose far less to future depreciation, while still getting a nearly new vehicle. That is the main reason the buy slightly used strategy appears on so many competitor pages. Buying new can still make sense if you plan to keep the car for a decade, because the later years lose value slowly, and you get the full warranty and the exact specification you want. Run both cases in the calculator: price the new car, then price the same model at 2 years old, and compare what each is worth after five more years.
Example 1: a $20,000 car at 15 percent per year for 5 years. Year 1 value is $17,000, year 2 is $14,450, year 3 is $12,282.50, year 4 is $10,440.13 and year 5 is $8,874.11, so total depreciation is $11,125.89. Example 2: a $10,000 car at 10 percent per year for 3 years is worth $7,290, so total depreciation is $2,710. Example 3: a $30,000 car at 15 percent per year is worth $25,500 after one year, $18,423.75 after three years and $13,311.16 after five years, which matches the pattern competitors show for a mainstream car. Change the rate to 10 percent and the same $30,000 car is worth $17,714.70 after five years, a difference of more than $4,400, which shows how much the rate choice matters.
The results on this page are estimates, not professional financial advice and not a valuation of any specific vehicle. Real resale prices depend on the exact make, model, mileage, condition, service history, local market and timing, so a dealer or private buyer may offer more or less than the figure shown here. Use the calculator to compare options, plan a sale and understand the cost of ownership, and get a proper valuation or professional advice before making a buying, selling, tax or business decision. For tax questions, such as whether depreciation can be claimed for a business vehicle, speak to a qualified tax professional in your country.
Use the declining balance depreciation formula: current value equals purchase price times (1 minus yearly rate divided by 100) to the power of years. For example, a $20,000 car at 15 percent per year for 5 years is worth $8,874.11, and total depreciation is $11,125.89. You can also work backwards: total depreciation percent equals purchase price minus current value, divided by purchase price, times 100.
A typical new car loses about 20 percent in the first year, then roughly 10 to 15 percent of its remaining value each following year. That gives a car depreciation per year pattern where the dollar loss shrinks over time even though the percentage stays similar. Luxury cars and some electric vehicles can lose 20 to 25 percent per year early on, while trucks and reliable economy cars often lose only 10 to 15 percent per year.
The average car depreciation rate used in most guides is about 15 percent per year, with 20 to 25 percent in the first year for a new car and slower rates after that. Over five years, that averages out to roughly 12 percent per year of the original price, because the car loses about 60 percent of its value in total. Use 10 to 12 percent for a slow depreciating model, 15 percent for an average car and 20 percent or more for a luxury car.
On average, a car loses about 60 percent of its original value after 5 years, so a $30,000 car is worth roughly $12,000 after five years at typical rates. A slow depreciating truck or popular SUV may keep 50 to 60 percent of its value, while a luxury car may keep only 30 to 40 percent. Your exact result depends on the yearly rate, mileage, condition and brand, so try your own numbers in the calculator.
The main factors affecting car depreciation are mileage, age, condition, brand reputation, market demand, fuel efficiency, color and accident history. High mileage and poor condition speed up the loss, while a full service history, a popular model and a neutral color slow it down. New model launches, fuel prices and local demand for that body style also matter, which is why the same model can hold value well in one market and poorly in another.
Cars that depreciate the least are usually reliable trucks, body on frame SUVs and popular Japanese models. Toyota Tacoma and 4Runner, Jeep Wrangler, Porsche 911, Toyota Land Cruiser and Ford F-150 are often named as strong holders, keeping 50 to 70 percent of their value after five years in many guides. Economy cars from reliable brands also do well, while luxury sedans and fast changing electric models usually depreciate the fastest.
Declining balance depreciation removes the same percentage of the current value each year, so the dollar loss is large early and small later, which matches real used car prices. Straight line depreciation spreads the same total loss evenly across every year, which is simple for bookkeeping but understates the first year loss and overstates later years. For a resale estimate, use declining balance; for a book value or a lease calculation, straight line may be the method your contract uses.
For a used car that is already 3 to 4 years old, use a lower rate, typically 10 to 15 percent per year, because the steep first year drop is already behind it. Well kept Japanese vehicles often suit 8 to 12 percent, while a used luxury vehicle may still need 15 to 20 percent. If you know the price it was new and its current price, you can estimate its past rate and use a similar rate for the future.
Yes, but it is rare. Collector cars, classic cars and limited production models can appreciate, and some sought after sports cars have held steady or risen. Ordinary cars used for daily transport almost always depreciate, because newer, safer and more efficient models keep arriving. Do not buy a normal car as an investment; buy it for transport and treat any value it keeps as a bonus.
The best time to sell a car is usually after the steepest drop has passed but before major service bills arrive, often around years 3 to 5 of ownership. Selling a nearly new car means you absorb the first year cliff yourself, while keeping a car for ten years spreads the loss thin but adds repair costs. Check the curve in the calculator, sell before a big service interval if you can, and compare the sale price with what the car would be worth one year later.
Car depreciation may be tax deductible if you use the vehicle for business, but the rules depend on your country and on whether you claim actual expenses or a standard mileage allowance. In the United States, business use may allow a depreciation deduction or a mileage deduction, but you usually cannot claim both for the same miles, and personal use is not deductible. Keep mileage logs and receipts, and ask a qualified tax professional which method fits your situation, because this page gives estimates only, not tax advice.
As a category, electric vehicle depreciation has been faster than for comparable petrol cars in recent years, because battery technology improves quickly, new models arrive often and incentives change used prices. Rates of 20 to 30 percent in the first year appear in several competitor tables, with 35 to 50 percent retained after five years. Individual models vary widely though, and high demand electric cars have held value far better than the category average, so check the specific model before you assume a fast rate.