Car Depreciation Calculator
The Car Depreciation Calculator estimates your car's resale value after a set number of years using an annual depreciation rate, showing total value lost.
What this means
Cars lose value fastest in the first few years — often 20% in year one. Depreciation is the single largest cost of ownership for most drivers, exceeding fuel and maintenance.
How we calculate it
Formula
Value after t years = Price × (1 − r)^t, where r is the annual depreciation rate. Total depreciation = Price − Value.Worked example
A $30,000 car depreciating 15% per year for 5 years:
- 1Value = 30,000 × (1 − 0.15)^5
- 2Value ≈ $13,311
- 3Total depreciation ≈ $16,689
Important assumptions
- Depreciation applies at a constant annual rate.
- Condition, mileage and market demand are not factored in.
Frequently asked questions
What's a realistic depreciation rate?
Around 15–20% per year is common, with the largest drop in the first year. Luxury and electric cars often depreciate faster initially.
How do I reduce depreciation?
Buy a few years old, maintain it well, keep mileage reasonable and choose reliable models with strong resale value. The biggest lever is avoiding the steepest first-year drop.