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Car Depreciation Calculator
See how much value your vehicle loses each year and what it will be worth down the road. Enter the price, a depreciation rate and the years, then press Calculate.
Written by TopicDrill Editorial Team·Updated June 2026
Value over time
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How the car depreciation calculator works
This calculator uses the declining balance method, the most realistic way to model a vehicle. Each year the car loses a set percentage of its current value, not its original price. That is why the value curve drops steeply at first and then flattens, exactly the shape you see in used car listings.
The first year is usually the harshest because a new car becomes a used car the moment you drive off the lot. After that, the dollar loss shrinks each year even though the percentage stays the same, since it applies to a smaller and smaller value.
A quick example
Buy a $35,000 car that depreciates 15% a year. After one year it is worth about $29,750, a $5,250 loss. After five years it is worth roughly $15,500, so total depreciation is about $19,500, or close to $3,900 a year on average.
Things to keep in mind
Real depreciation depends on the make, mileage, condition and market demand, so treat this as an estimate. To research model-specific values, check resources like Kelley Blue Book. You can also weigh ownership against leasing with our other free calculators.
Frequently asked questions
How fast does a car depreciate?
Most new cars lose 15% to 25% of their value in the first year and around 15% of the remaining value each year after that. Many cars are worth roughly half their original price after five years, though it varies by brand and model.
How is car depreciation calculated?
This calculator uses the declining balance method. Each year the car loses a fixed percentage of its current value, not its original price. That matches reality, where the dollar loss is largest early on and shrinks as the car ages.
Which cars hold their value best?
Trucks, certain SUVs and reliable brands with strong demand tend to depreciate more slowly. Luxury sedans and cars with high maintenance costs often lose value faster. Mileage, condition and accident history also matter a lot.
Why does depreciation matter?
Depreciation is usually the single largest cost of owning a car, often more than fuel or repairs. Knowing the curve helps you decide when to buy, how long to keep a car, and whether leasing or buying makes more sense for you.
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