Car Depreciation Calculator
Enter your car's purchase price and age to see its current estimated value, total depreciation in dollars, and the percentage lost. Switch between the industry-standard curve, straight-line, or a custom annual rate. The year-by-year schedule and chart show exactly how value drops from now to year 10.
How car depreciation works
A car loses value the moment it is driven off the lot because it changes from "new" to "used" in the eyes of the market. For an average new vehicle, roughly 9% of value disappears the instant the sale completes, and the total first-year loss reaches about 19%. By the end of year 5, roughly half the original price is gone. This happens because buyers always have access to newer models, because parts and technology evolve, and because every mile adds wear. The rate is not constant: the steepest drop comes in years 1-3, then slows as the car moves from "nearly new" to "established used." After year 7 or 8 the annual percentage loss is usually small in dollar terms because the remaining base is low.
Which depreciation model to choose
The industry-standard curve tracks how real-world resale prices fall for a typical new car based on observed auction and private-sale data. Use it when you want a realistic market-value estimate. Straight-line depreciation spreads equal dollar amounts per year to a chosen residual - accountants use it for asset tracking and businesses use it to match tax schedules. Declining-balance with a custom rate is useful when you already know how fast a particular make and model loses value (for example a car you've owned before, or a model whose history you've researched). A 15% annual rate produces results close to the industry average; lower rates (8-10%) suit trucks and Jeeps with strong resale; higher rates (20-25%) suit luxury sedans and older EVs.
Factors that speed up or slow down depreciation
Brand reputation and demand are the biggest drivers: trucks, compact SUVs and off-roaders hold value because buyers reliably want them used. High mileage, accident history, unpopular colours (unusual or very loud colours cut resale by 5-15%), and missing service records all accelerate depreciation. Keeping the car clean, maintaining a full service history, staying under 12,000 to 15,000 miles per year, and buying in a strong-demand segment are the best ways to preserve value. Luxury sedans and large luxury vehicles depreciate fastest because the gap between new price and what a used buyer will pay is vast. Early-generation EVs depreciated sharply due to rapid battery technology improvements and government incentives for new models, though newer EVs from popular brands are holding value better.
Depreciation and the real cost of owning a car
Depreciation is usually the single largest cost of car ownership, bigger than fuel, insurance, or maintenance for most drivers. A $35,000 car that loses 50% of its value over five years costs $3,500 per year in depreciation before any other expense. Comparing that figure across vehicles is one of the best ways to size up the true annual cost. Certified pre-owned vehicles bought at 2-3 years of age have already absorbed the steepest first-year falls but often come with remaining factory warranties, making them a popular choice for minimising this cost. Leases essentially have you pay for the depreciation during the lease term, so a model with slow depreciation is cheaper to lease as well.
5-year depreciation by vehicle category
| Vehicle type / model | 5-year depreciation | Retention (%) |
|---|---|---|
| Jeep Wrangler (best resale) | 27% | 73% |
| Toyota Tacoma | 30% | 70% |
| Toyota Tundra | 37% | 63% |
| Pickup trucks (average) | 40% | 60% |
| All vehicles (average) | 50% | 50% |
| BMW 5 Series | 67% | 33% |
| Mercedes-Benz E-Class | 67% | 33% |
| BMW 7 Series | 71% | 29% |
| Nissan Leaf (EV, older) | 72% | 28% |
Average percentage of original value LOST after five years. Data: iSeeCars / Edmunds industry averages.
Frequently asked questions
How much does a car depreciate in the first year?
A new car typically loses about 19% of its purchase price in the first year. This includes a roughly 9% instant drop at the point of sale from "new" to "used," plus ongoing market depreciation through the year. A $35,000 car therefore loses around $6,650 in year one.
How is car depreciation calculated?
The most common method for estimating real-world value is the declining-balance approach using observed market-data retention rates: multiply the original purchase price by the fraction of value remaining at the chosen age. For example, at 3 years the average retention is 58%, so a $30,000 car is worth roughly $17,400. Straight-line depreciation divides the depreciable amount (price minus residual) equally across the useful life and is used mainly for accounting and tax purposes.
Which cars depreciate the least?
Vehicles with the best five-year resale value are typically the Jeep Wrangler and Wrangler Unlimited (around 27% depreciation), the Toyota Tacoma and Tundra (29-37%), and popular full-size pickups like the Chevrolet Silverado and GMC Sierra. These models retain value because demand for them in the used market stays consistently high.
Which cars depreciate the most?
Large luxury sedans lose the most value: the BMW 7 Series, Mercedes-Benz S-Class and E-Class, and Jaguar XJL all lose roughly 65-72% of their value in five years. Early-generation electric vehicles such as the Nissan Leaf and Chevrolet Volt also had very high depreciation due to rapidly improving EV technology and new-EV incentives reducing demand for older used models.
Does an accident permanently increase depreciation?
Yes. Even after a fully repaired accident, the car's Carfax or AutoCheck history shows the incident, which buyers discount on the resale market. Minor damage can reduce resale value by 10-25%; severe structural damage can reduce it by 50% or more. This residual loss is sometimes called "diminished value" and can sometimes be recovered from the at-fault party's insurer.
Is the depreciation shown here the same as my tax deduction?
No. The calculator shows market-value depreciation, which estimates what your car is worth if you sold it. Tax depreciation for business vehicles uses a separate system (MACRS in the US, or Section 179 deductions) that follows its own rules and schedules regardless of actual resale value. Consult a tax professional for the deductible amount on a business-use vehicle.