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Short answer
At a constant 15% a year, a car loses half its value in about 4.3 years. The time to halve is ln(0.5) ÷ ln(1 − rate).
1. The formula
Years to lose half = ln(0.5) ÷ ln(1 − rate). It does not depend on the starting price.
2. Years to halve by yearly rate
| Yearly loss | Time to lose half |
|---|---|
| 10% | 6.6 years |
| 15% | 4.3 years |
| 20% | 3.1 years |
| 25% | 2.4 years |
3. Value of a $30,000 car by rate
| Yearly loss | After 1 year | After 3 years | After 5 years | After 10 years |
|---|---|---|---|---|
| 10% | $27,000 | $21,870 | $17,715 | $10,460 |
| 15% | $25,500 | $18,424 | $13,311 | $5,906 |
| 20% | $24,000 | $15,360 | $9,830 | $3,221 |
| 25% | $22,500 | $12,656 | $7,119 | $1,689 |
4. What it means
- A car that loses 20% a year is worth half in about 3 years.
- Real cars lose more in the early years, so a new car can reach half its value sooner than a constant rate suggests.
- Models that hold value better, with 10% a year, take about 6.6 years.
On the Car Depreciation Calculator's typical curve (18%, then 15%, then 10%), a $38,500 midsize SUV is worth $19,562 after 5 years, which is about 51% of its price.
5. Frequently asked questions
How long does a car take to lose half its value?expand_more
About 4.3 years at 15% a year, 3.1 at 20% and 6.6 at 10%.
Does the starting price change the time to halve?expand_more
No. The time depends only on the yearly rate.
Do cars lose half their value in five years?expand_more
Often close to it. On the calculator's typical curve a midsize SUV keeps about 51% after 5 years.
What is the formula for years to halve?expand_more
ln(0.5) ÷ ln(1 − rate).