Car Depreciation Calculator
Calculate how much a car loses in value over time. New cars lose 15–25% in year one and 45–60% within five years — see exactly what your vehicle is worth and when it bottoms out.
🚗 Auto💰 Value = Purchase Price × (1 − Annual Rate%)ⁿ
Purchase price ($)
Annual depreciation rate (%)
Years owned
Please enter valid values.
Formula & Reference
| Variable | Formula | Units |
|---|---|---|
| Car Depreciation Calculator | Value = Purchase Price × (1 − Annual Rate%)ⁿ | $ remaining value |
Step-by-Step Examples
Example 1
Average New Car
$35,000, 20% depreciation, 5 years.
- Year 1: $28,000 (-$7,000)
- Year 2: $22,400 | Year 3: $17,920
- Year 5: ~$11,469
- Total lost: $23,531 (67%)
✓ ~$11,469 value after 5 years
Example 2
Luxury Car
$65,000, 25% depreciation, 3 years.
- Year 1: $48,750
- Year 2: $36,563 | Year 3: $27,422
- Lost $37,578 (58%) in 3 years
✓ ~$27,422 after 3 years
Example 3
Used Car Slower Depreciation
$15,000, 12% per year, 4 years.
- Older cars depreciate slower
- Year 4 value: ~$9,041
- Buying used avoids steepest part of curve
✓ ~$9,041 after 4 more years
Real-World Applications
Car Buying
Calculate the true cost of new vs used over time.
Insurance
Vehicle value determines insurance premiums and property tax.
Lease vs Buy
Depreciation is the primary component of a lease payment.
Net Worth
Accurate vehicle valuation keeps net worth realistic.
Common Mistakes to Avoid
⚠️
Assuming all cars depreciate equally
Toyota and Honda hold value far better than many domestic brands. Luxury cars often depreciate fastest.
⚠️
Ignoring the off-the-lot drop
A new car often loses 5–10% of value the moment you drive it off the lot.
⚠️
Forgetting mileage impact
High mileage accelerates depreciation significantly beyond calendar-year estimates.
Frequently Asked Questions
How much does a car lose in year one? ▾
Typically 15–25%. Luxury cars often more. Why buying 1–2 year old with low miles is often the best value.
Best cars for retained value? ▾
Toyota Tacoma, 4Runner, Jeep Wrangler, Honda CR-V consistently lead retained value rankings.
Is a car an investment? ▾
No — it’s a depreciating asset. Minimize the loss by buying used, maintaining well, and holding 10+ years.
How does depreciation cause negative equity? ▾
Rapid depreciation can leave you owing more than the car is worth — especially risky if totaled or needing to sell early.
When does depreciation slow? ▾
After ~100,000 miles and 5–6 years, dollar depreciation slows significantly as the market has already priced the age/mileage in.