Free Car Depreciation calculator
See exactly what your car will be worth in one, three, or five years. Enter the price and depreciation rates to watch the value, total loss, and percent retained fall year by year — updated live, as you type.
On this page15 sections
| Year | Value | Lost | Retained |
|---|---|---|---|
| 1 | $28,000 | $7,000 | 80% |
| 2 | $23,800 | $4,200 | 68% |
| 3 | $20,230 | $3,570 | 58% |
| 4 | $17,196 | $3,035 | 49% |
| 5 | $14,616 | $2,579 | 42% |
Estimates only, based on the rates you enter. Actual resale value varies by vehicle.
Results are estimates. Consult a professional.
What is car depreciation?
Car depreciation is the amount of value your vehicle loses over time. It is the gap between what you paid and what the car is worth today, and for most owners it is the single largest cost of ownership — bigger than fuel, insurance or repairs. A new car starts losing value the moment you drive it off the lot, and it keeps losing value every year you own it.
Depreciation matters because it is real money. When you sell or trade in, the price you get is set by the car's depreciated value, not by what you paid. Knowing the curve up front tells you what a car will likely be worth in three or five years — which is exactly what this calculator projects.
How the car depreciation calculator works
Depreciation is not a flat dollar amount each year. It is a percentage of the car's current value, so the loss is largest at the start and shrinks as the car ages. This is called the declining-balance method, and it is how the calculator models the curve.
Because the first year is so much steeper than the rest, the calculator uses two rates: a first-year rate (default 20%) and a steady annual rate for every year after (default 15%). You can change both to match a specific make, model or class.
Car depreciation by year (the 5-year curve)
This table shows the default curve for a $35,000 car — 20% in year one, then 15% per year. Use it as a ballpark before you enter your own price and rates. The retained column is the share of the original price the car still holds.
| End of year | Value | Lost that year | Retained |
|---|---|---|---|
| Year 1 | $28,000 | $7,000 | 80% |
| Year 2 | $23,800 | $4,200 | 68% |
| Year 3 | $20,230 | $3,570 | 57.8% |
| Year 4 | $17,196 | $3,035 | 49.1% |
| Year 5 | $14,616 | $2,579 | 41.8% |
Default rates: 20% first year, 15% each year after, applied with the declining-balance method. Your actual figures depend on make, model, mileage and condition.
Notice how the dollar loss shrinks each year even though the rate after year one is constant. That is the declining balance at work: 15% of a smaller number is a smaller loss. The steepest drop is always the first 12 months.
A worked example of car depreciation
Maria buys a new SUV for $35,000 and plans to keep it 5 years before trading up. She uses the default rates — 20% the first year and 15% each year after — to estimate what the car will be worth at trade-in.
Step 1 — Apply the first-year drop
Year one takes 20%: 35,000 × (1 − 0.20) = $28,000. That is a $7,000 loss in the first 12 months — the steepest year by far.
Step 2 — Apply 15% for each year after
Each following year takes 15% of the prior value. Year 2: 28,000 × 0.85 = $23,800. Year 3: 23,800 × 0.85 = $20,230. Year 4: 20,230 × 0.85 = $17,196.
Step 3 — Read off the final value
Year 5: 17,195.50 × 0.85 = $14,616. After five years the SUV holds about 41.8% of its price.
Step 4 — Total the loss
Total depreciation is 35,000 − 14,616 = $20,384 — about $4,077 a year on average, and most of it front-loaded into year one.
What affects how fast a car depreciates
Two identical-price cars can be worth very different amounts after five years. The calculator's default rates are an average; these factors push your real curve faster or slower.
- Make and model — brand reputation and reliability set resale demand. Some badges hold value far better than others in the same class.
- Mileage — high annual mileage accelerates depreciation; most curves assume about 12,000–15,000 miles a year.
- Condition and history — accidents, a salvage title or skipped maintenance can knock thousands off resale value.
- Body style — trucks and compact cars tend to retain value best; luxury sedans and EVs have historically depreciated fastest.
- Supply and demand — fuel prices, new-model incentives and used-market shortages all move resale values.
- Color and options — mainstream colors and desirable options sell faster and for more than niche choices.
Which cars depreciate the most and least
Vehicle class is the biggest lever on the curve. These five-year loss ranges come from published industry data and show why the same dollar buys very different residual value.
| Vehicle type | Typical 5-year loss | Why |
|---|---|---|
| Compact cars | ~50% | Reliable, cheap to run, steady demand |
| Full-size trucks | 45–55% | Strong, consistent resale demand |
| SUVs / crossovers | 55–60% | Popular but plentiful supply |
| Luxury sedans | 65–75% | High price, fast tech and style turnover |
| Electric vehicles | 60–70% | Battery and incentive effects on resale |
Five-year value loss ranges synthesized from Kelley Blue Book, Edmunds and Carfax depreciation reporting. Specific models vary widely within each class.
If resale value matters to you, the body style you choose moves the needle more than almost any other decision. A compact or truck that loses half its value beats a luxury sedan that loses three-quarters of it.
How to lose less money to depreciation
You cannot stop depreciation, but you can sidestep the worst of it. Most of the loss happens in the first year, so the biggest savings come from how and what you buy.
Buy a 1–3 year-old car
Let the first owner absorb the steep year-one drop. A lightly used car has already shed 20% or more, yet often has years of warranty and useful life left. This single move avoids the steepest part of the curve.
Choose models that hold value
Before buying, check the projected five-year resale for the exact model. Two cars at the same sticker price can differ by thousands at trade-in. Compact cars and trucks tend to lead; luxury and EV models tend to lag.
Keep mileage and condition in check
Stay near average annual mileage, keep service records, fix damage promptly and pick a mainstream color. Each one protects resale value when you finally sell.
Depreciation and total cost of ownership
Depreciation is the largest line in total cost of ownership, but it is not the only one. To see the full picture, pair this estimate with your running costs — use the fuel cost calculator for what you spend at the pump and the auto loan calculator for your financing.
One trap to watch: financing. If a car depreciates faster than you pay down the loan, you owe more than the car is worth — negative equity. Putting more money down and choosing a slow-depreciating model both reduce that risk.
For insurance, depreciation is why a standard payout on a totaled car reflects its current value, not what you paid. Gap insurance covers the difference between that value and your remaining loan balance — most useful in the early years, when the gap is widest.
Car depreciation terms defined
How accurate is this car depreciation calculator?
The math is exact. Given a price and your two rates, the declining-balance formula returns the precise value at the end of every year. If your inputs are right, the projected values are right to the dollar.
The default rates are the estimate. Real depreciation depends on make, model, mileage, condition and a used market that shifts year to year, so no fixed rate fits every car. Treat the defaults as a sensible average — about 20% the first year and 15% after — and adjust them with the model-specific resale data from Kelley Blue Book, Edmunds or Carfax for a tighter projection. For planning a purchase or a sale, that ballpark is usually enough to make the right call.
Frequently asked questions about the free Car Depreciation calculator
About this Car Depreciation calculator
This calculator runs entirely in your browser — nothing you enter is sent anywhere. It projects a car's future value with the declining-balance method, using a steeper first-year rate and a steady rate for the years after, and shows the value, dollars lost, and percent retained for each year.
It's one of our transportation calculators, part of the wider library at calculators. Pair it with the fuel cost and auto loan calculators to see the full cost of owning a car.