Car Depreciation Calculator
Estimate your car's current market value from purchase price, age, and mileage using standard depreciation curves.
See how value changes each year.
Car depreciation is the loss in value a vehicle experiences over time. New cars depreciate fastest in the first year; the rate slows as the vehicle ages. Depreciation is the largest hidden cost of car ownership — often exceeding fuel, insurance, and maintenance combined.
Straight-line depreciation formula: Annual Depreciation = (Purchase Price − Residual Value) ÷ Useful Life (years)
Declining balance (more realistic) formula: Value after n years = Purchase Price × (1 − Depreciation Rate)^n
Typical annual depreciation rates:
- Year 1: 15–25% of original value lost
- Year 2: 12–18% of original value lost
- Year 3: 10–15%
- Year 4: 8–12%
- Year 5: 6–10%
- Years 6–10: 5–8% per year
Total depreciation benchmarks:
- After 1 year: 15–25% of value lost
- After 3 years: 35–45% of value lost
- After 5 years: 50–60% of value lost
- After 10 years: 70–80% of value lost
Cost-per-mile (depreciation component): Depreciation per mile = Annual Depreciation ÷ Annual Miles Driven
What each variable means:
- Residual value — the estimated trade-in or resale value at a future point; used in lease calculations and trade-in negotiations
- Annual depreciation rate — varies by brand, model, and demand. Trucks and SUVs depreciate slower than sedans. Luxury cars depreciate fastest ($15,000–$25,000 in year one).
- Mileage impact — above 15,000 miles/year accelerates depreciation by 1–2% per additional 5,000 miles
Brands that hold value best (5-year residual %, 2024):
- Toyota Tacoma: ~60% of original value retained
- Subaru Outback: ~55%
- Honda CR-V: ~52%
- BMW 7-Series: ~30% (fastest luxury depreciation)
- Chevrolet Malibu: ~28%
Worked example: New car: $42,000. Declining balance depreciation at 15%/year.
Year 1: $42,000 × (1 − 0.15)^1 = $42,000 × 0.85 = $35,700 Year 3: $42,000 × (0.85)^3 = $42,000 × 0.6141 = $25,793 Year 5: $42,000 × (0.85)^5 = $42,000 × 0.4437 = $18,636
Total depreciation in 5 years: $42,000 − $18,636 = $23,364 lost to depreciation Cost per year: $4,673/year before fuel, insurance, or maintenance.