Car Depreciation Chart: How Much Value Does a Car Lose Each Year?
A car depreciation chart shows how a vehicle's estimated value can fall as it gets older. Use the Car Depreciation Calculator to model a purchase price, depreciation rate and ownership period, then use this guide to understand the result.
Quick answer
Vehicle depreciation is the decline in market value caused by age, mileage, condition, demand, supply and other factors. The first year is often one of the steepest periods of value loss, but there is no universal depreciation rate that accurately predicts every make and model.
A simple planning model applies a percentage decline to the remaining value each year. This produces a compounding curve: the dollar loss tends to be larger when the car is more valuable and smaller as the remaining value declines.
Example car depreciation chart
The following is an illustrative example, not a market valuation. Suppose a vehicle starts at $32,000 and we use a constant 15% annual depreciation assumption.
| Year | Estimated value | Value retained | Total value lost |
|---|---|---|---|
| 0 | $32,000 | 100% | $0 |
| 1 | $27,200 | 85% | $4,800 |
| 2 | $23,120 | 72.3% | $8,880 |
| 3 | $19,652 | 61.4% | $12,348 |
| 4 | $16,704 | 52.2% | $15,296 |
| 5 | $14,199 | 44.4% | $17,801 |
| 10 | $6,317 | 19.7% | $25,683 |
This chart demonstrates the shape of a compounding depreciation curve. It should not be interpreted as the expected resale value of every $32,000 car.
How car depreciation is calculated
A common declining-balance model is:
Estimated value = original price × (1 − depreciation rate)years
For example, at a 15% annual rate, a $30,000 vehicle after five years would be approximately:
$30,000 × 0.855 ≈ $13,311
The important detail is that the percentage is applied to the remaining value, not the original price every year. That is why this model produces a curved line rather than a straight line.
Why the first year can hurt the most
A new vehicle can lose a significant portion of its value after it becomes a used vehicle. The exact amount varies widely, but the principle is important when comparing buying new with buying a lightly used vehicle.
Current market research can produce very different figures by dataset and vehicle category. For example, recent 2026 calculators and market-data sites emphasize that depreciation is front-loaded and varies by model, mileage and market. That is why a generic chart should be treated as a planning baseline rather than a precise appraisal.
What changes a car's depreciation rate?
Make and model
Some vehicles have stronger resale demand than others. Reliability reputation, supply, brand perception, replacement cycles and buyer preferences can all affect value retention.
Mileage
Higher mileage generally reduces resale value because buyers expect more wear and future maintenance. Annual mileage should therefore be considered when interpreting a depreciation chart.
Condition and accident history
Mechanical condition, paint, interior wear, tire condition and accident history can materially change a vehicle's market value. A mathematical depreciation curve cannot observe those details unless they are explicitly included in the model.
Market conditions
Used-car prices can move because of interest rates, inventory, fuel prices, consumer preferences, supply shortages and changes in new-car pricing. A chart generated today can therefore differ from a chart generated a year from now.
Vehicle type and technology
Luxury vehicles, trucks, SUVs, electric vehicles and economy cars can have different resale patterns. New technology, incentives and model updates can also affect demand for older vehicles.
Car depreciation calculator vs. a real resale valuation
A depreciation calculator answers a planning question: “If the vehicle loses value at this assumed rate, what might it be worth later?” A resale valuation asks a different question: “What might this specific vehicle sell for in the current market?”
The second question needs current listings or transaction data, plus vehicle-specific information such as make, model, trim, year, mileage, condition and location. CalculatePilot's calculator is intended as an estimate rather than an appraisal.
How to use a depreciation chart when buying a car
- Start with the realistic purchase price rather than an unrealistic sticker-price assumption.
- Model several depreciation rates instead of relying on one percentage.
- Compare three-, five- and seven-year ownership horizons.
- Consider mileage and condition separately from the mathematical depreciation curve.
- Compare the expected value loss with the vehicle's other ownership costs.
Worked scenario: comparing ownership periods
Suppose a $30,000 vehicle is modeled at 15% annual depreciation. After three years, the simple compounding estimate is about $18,423. After five years it is about $13,311. The difference illustrates why the length of ownership matters when thinking about depreciation cost per year.
However, the actual resale price could be materially higher or lower. If a particular model has unusually strong resale demand, the market may outperform the generic curve. If it has high mileage, damage or weak demand, it may underperform.
Frequently asked questions
What is a typical car depreciation rate?
There is no single rate that applies to every car. Many educational calculators use a baseline in the mid-teens for long-term modeling, while real-world first-year depreciation can be higher and later-year depreciation can change. Use multiple assumptions when planning.
How much does a car depreciate after five years?
The answer varies substantially by make, model, mileage and condition. A generic 15% compounding model retains about 44% of the original value after five years, but that is an illustrative assumption, not a universal market result.
Do electric cars depreciate faster?
Some EVs have experienced rapid depreciation, but the pattern varies by model and market. Technology changes, incentives, new model pricing, battery expectations and used-market demand can all affect resale values.
Can I calculate depreciation by mileage?
You can incorporate mileage into a more detailed valuation model, but mileage is not simply a fixed dollar amount per mile for every vehicle. The effect depends on age, model, condition and market expectations.
Related CalculatePilot tools
Estimates are for educational planning only. Actual resale values depend on the vehicle and current market. This page is not a professional appraisal or financial advice.