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Car Depreciation Calculator
Enter what you paid and how long you'll keep it to see the value fall year by year — the ~20% first-year cliff, then ~15% a year of what's left — plus the total you lose to depreciation, usually the single biggest cost of owning a car.
Short answer
A new car loses about 20% in year one, then roughly 15% a year of what's left. A $35,000 car is worth about $28,000 after 1 year and $15,500 after 5 — nearly $20,000 gone, usually more than five years of fuel. Enter your price below for the year-by-year curve.
Defaults are market averages — enter your model's real rates if you know them.
Value after 5 years
$14,616
- Total lost to depreciation
- $20,384
- Value retained
- 42%
- Average loss per year
- $4,077
| Year | Value | Lost that year |
|---|---|---|
| 1 | $28,000 | $7,000 |
| 2 | $23,800 | $4,200 |
| 3 | $20,230 | $3,570 |
| 4 | $17,196 | $3,035 |
| 5 | $14,616 | $2,579 |
Depreciation by purchase price
What a car is worth after N years (by purchase price)
| Bought for | After 1 yr | After 3 yrs | After 5 yrs | After 8 yrs |
|---|---|---|---|---|
| $15,000 | $12,000 | $8,670 | $6,264 | $3,847 |
| $20,000 | $16,000 | $11,560 | $8,352 | $5,129 |
| $25,000 | $20,000 | $14,450 | $10,440 | $6,412 |
| $30,000 | $24,000 | $17,340 | $12,528 | $7,694 |
| $35,000 | $28,000 | $20,230 | $14,616 | $8,976 |
| $40,000 | $32,000 | $23,120 | $16,704 | $10,258 |
| $50,000 | $40,000 | $28,900 | $20,880 | $12,823 |
| $60,000 | $48,000 | $34,680 | $25,056 | $15,388 |
| $75,000 | $60,000 | $43,350 | $31,320 | $19,235 |
Declining balance at 20% in year one and 15% a year after. Mileage, condition, brand reputation and demand move real resale values either way.
Year by year on a $35,000 car
| Year | Value at year end | Lost that year | Lost in total |
|---|---|---|---|
| 1 | $28,000 | $7,000 | $7,000 |
| 2 | $23,800 | $4,200 | $11,200 |
| 3 | $20,230 | $3,570 | $14,770 |
| 4 | $17,196 | $3,035 | $17,805 |
| 5 | $14,616 | $2,579 | $20,384 |
| 6 | $12,424 | $2,192 | $22,576 |
| 7 | $10,560 | $1,864 | $24,440 |
| 8 | $8,976 | $1,584 | $26,024 |
Notice the per-year loss shrinking: depreciation is a percentage of what the car is still worth, so the longer you keep it, the cheaper each additional year gets.
The cost nobody budgets for
Fuel, insurance and servicing all arrive as bills you notice. Depreciation never does — it quietly removes more money than any of them, and only becomes visible on the day you sell. The shape of the curve is the useful part: because each year's loss is a percentage of a shrinking value, the expensive years are the early ones. That single fact explains both classic pieces of advice — buy a car that has already taken its first-year hit, and then keep it long enough that the early loss spreads thin.
How we calculate this
A declining-balance model with the first year separated out:
- Year one. value × (1 − first-year rate). The default 20% reflects the drop a new car takes the moment it is no longer new.
- Every later year. the remaining value × (1 − later rate), default 15% — applied to what's left, not the original price, which is why the dollar loss shrinks each year.
- Totals. total loss is purchase price minus the final value; percent retained is final ÷ purchase — the figure to compare across cars and holding periods.
Assumptions
- Rates are broad market averages: individual models vary enormously — some trucks and hybrids hold value far better, luxury sedans and EVs with fast-moving tech often worse.
- Mileage is assumed typical (~12,000 miles/year); heavy mileage depreciates faster than this model shows.
- Condition, accident history, colour and regional demand all move real offers; treat the output as a planning baseline, not an appraisal.
- Used-car market shocks (2021–22) can suspend these patterns entirely for a year or two.
Sources
Last reviewed: July 30, 2026
Frequently asked questions
How fast does a new car depreciate?+
Roughly 20% in the first year, then about 15% a year of whatever the car is still worth. On a $35,000 car that's about $7,000 gone in twelve months and around $15,500 of value left after five years. The loss shrinks in dollar terms every year because the percentage applies to a smaller base — which is exactly why long ownership is cheap ownership.
Is depreciation really the biggest cost of owning a car?+
For most drivers, yes — and it's invisible because you never write a cheque for it. Over five years a typical new car loses more to depreciation than it burns in fuel, and often more than insurance and repairs combined. It only becomes visible on the day you sell or trade in, which is why running the numbers before you buy matters more than after.
Why do people say to buy a 2-3 year old car?+
Because the first owner absorbed the steepest part of the curve. A three-year-old car has already taken its 20% first-year hit plus two flatter years, so your money then depreciates from a much lower base — you lose meaningfully less per year of ownership for the same car. The counterweights are remaining warranty, unknown maintenance history, and financing rates that run higher on used cars.
Which cars hold their value best?+
Historically trucks, body-on-frame SUVs and a handful of reliability-famous brands retain the most, while luxury sedans, large EVs and anything with fast-moving technology tend to lose the most. Model-specific resale data (KBB, Edmunds, iSeeCars) beats any average — if you know your model's real record, enter its rates in the calculator instead of the defaults.
Does mileage affect depreciation?+
Substantially. These figures assume roughly average use of about 12,000 miles a year; a car driven 25,000 miles a year will be worth noticeably less than the table shows at the same age, and a genuinely low-mileage example commands a premium. Condition, service records, accident history and even colour move real offers too.
How do I reduce what depreciation costs me?+
Three levers, in order of power: buy past the first-year cliff (used), keep the car longer so the early loss spreads over more years, and choose a model with a strong resale record. Maintenance records and a clean history report protect the value you have; there's nothing you can do about the market itself, which is why the honest plan is to buy well and hold.
Market-average estimates — individual models, mileage and condition vary widely. Nothing you enter leaves your browser.