How to use the car depreciation calculator
- 1 Enter the price paid and the car's age when bought (0 for new).
- 2 Enter the years you will keep it.
- 3 Adjust the first-year and later-year loss rates if you like.
- 4 Enter the miles a year and read the value and cost of depreciation.
Worked example
A new $40,000 car kept 5 years and driven 12,000 miles a year, losing 20% in year 1 and 15% a year after. It is worth $32,000 after one year and $16,704.20 after five. It loses $23,295.80 (58% of the price): about $388 a month or 39 cents a mile.
Losing less to depreciation
- Buy 2 to 3 years old to skip the steepest drop.
- Choose models that hold value.
- Keep mileage reasonable and service records.
- Keep the car longer: yearly loss shrinks over time.
See the payment with the Car Loan Calculator, compare leasing with the Car Lease Calculator, and check your budget with the Car Affordability Calculator.
Features
Year by year
Value at the end of each year you own it.
New or used
A used car skips the big first-year drop.
Cost per month and mile
Depreciation as a running cost.
When to use it
New vs used
Compare a new car with a 2 or 3-year-old one.
Financing
Avoid owing more than the car is worth. See the payment with the Car Loan Calculator.
Leasing
A lease charges you for depreciation. Compare with the Car Lease Calculator.
Budgeting
See the full cost with the Car Affordability Calculator.
Related Home and Auto tasks
Frequently asked questions
How much does a car depreciate per year?
A common estimate is about 20% in the first year and 15% a year for the next few years. Actual rates vary a lot by make, model, mileage and condition.
How much is a car worth after 5 years?
Often about 40% to 50% of the original price. At 20% then 15% a year, a $40,000 car is worth about $16,700 after 5 years.
Why do new cars lose value so fast?
A new car becomes used the moment it is sold, and the first owner pays for that. Incentives on new models and supply also push used prices down.
Which cars hold their value best?
Trucks, some SUVs and models with strong reliability records, such as many Toyota and Honda models, tend to depreciate more slowly. Luxury cars and some EVs often lose value faster.
Does mileage affect depreciation?
Yes. Above-average mileage (more than about 12,000 to 15,000 miles a year) lowers value, and low mileage raises it.
Is buying a used car better because of depreciation?
A 2 to 3-year-old car has already taken the steepest drop, so the next owner loses less each year. Weigh that against repairs and warranty coverage.
What is negative equity?
Owing more on a car loan than the car is worth. Long loans with small down payments make it more likely; GAP insurance covers the difference if the car is totaled.
Can I deduct car depreciation?
Only for business use. Self-employed people can deduct depreciation (or use the standard mileage rate, which includes 35 cents a mile of depreciation in 2026).
How do I find my car's current value?
Check pricing guides and recent sale listings for the same model, year, mileage and condition.
Does this calculator use real market data?
No. It uses the depreciation rates you enter, which are typical averages. Real values depend on the market.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Built and reviewed by Hamza Farooq, founder and lead developer
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