Short answer
On the calculator's typical curve a $38,500 car loses about $11,665 (30%) in its first two years and only about $7,272 over the next three, so a 2-year-old car costs less per year in depreciation.
1. Year-by-year loss on a $38,500 new car
Using the Car Depreciation Calculator's typical curve for a midsize SUV: 18% in year one, 15% in year two, then 10% a year.
| Year | Start value | End value | Value lost |
|---|---|---|---|
| 1 | $38,500 | $31,570 | $6,930 |
| 2 | $31,570 | $26,835 | $4,736 |
| 3 | $26,835 | $24,151 | $2,683 |
| 4 | $24,151 | $21,736 | $2,415 |
| 5 | $21,736 | $19,562 | $2,174 |
2. What it shows
- The first two years take about $11,665, which is 30% of the price.
- The next three years take about $7,272 together, about $2,424 a year.
- A buyer who purchases at two years old skips most of the steepest loss.
3. Cost per year of depreciation
| Buyer | Years held | Depreciation lost | Per year |
|---|---|---|---|
| New buyer, 5 years | 5 | $18,938 | $3,788 |
| Buys at 2 years old, holds 3 years | 3 | $7,272 | $2,424 |
The used buyer pays a higher price than the lost value suggests, because sellers price a used car above its depreciated value. Compare real listings.
4. Other costs to weigh
- A used car may need more repairs once the warranty ends.
- Loan interest is often higher on used cars.
- New cars may carry better financing offers and warranty cover.
5. Frequently asked questions
Do cars lose the most value in the first year?expand_more
Yes. The calculator's typical curve takes 18% in year one for a midsize SUV, then 15%, then 10% a year.
Is a 2-year-old car cheaper to own than a new car?expand_more
Often in depreciation terms, because the steepest loss has been absorbed by the first owner. Include repair and financing costs.
How much does a $38,500 car lose in 5 years?expand_more
About $18,938 on the typical curve, or 49.2%.
Where can I compare real prices?expand_more
Check used-car listings for similar mileage and condition, since the calculator is an estimate.