Car Depreciation Calculator
Calculate your car's current value after depreciation. Enter the purchase price, age, and annual depreciation rate to see how your vehicle's value changes year by year.
Why the first year hits hardest
New cars typically lose around 20% of their value in the first year alone — driving off the lot converts a 'new' car into a 'used' one in the eyes of the market, which triggers a steep initial value drop regardless of actual condition or mileage. This calculator models that steeper first-year drop before switching to a more gradual annual rate.
After the first year, depreciation typically slows to a more gradual pace, commonly cited in the 10-18% range annually depending on the make, model, and reliability reputation — luxury brands and vehicles with historically poor reliability often depreciate faster than economy brands known for longevity.
Factors that affect depreciation beyond this estimate
Actual depreciation varies significantly by brand reputation, mileage, condition, local market demand, and broader economic factors like fuel prices (which can affect demand for larger vehicles) — this calculator provides a general estimate using typical industry patterns, not a precise valuation for your specific vehicle.
For an actual current value, tools that reference real transaction data for your specific make, model, mileage, and condition will be more accurate than a generalized depreciation curve like this one. See our car depreciation guide for typical rates by vehicle type.
Frequently asked questions
Why do new cars lose so much value in the first year?
Once a car is purchased and driven, it's classified as 'used' regardless of condition or mileage, which causes a steep initial value drop — commonly around 20% in the first year alone, before depreciation slows to a more gradual pace.
Do all cars depreciate at the same rate?
No — depreciation rates vary significantly by brand, model, reliability reputation, and market demand. Luxury vehicles and less reliable models often depreciate faster than economy brands known for durability.
How much does a car depreciate per year?
New cars depreciate roughly 15-25% per year on average. The first year is typically the steepest drop — new cars can lose 20-30% of value in year one alone. After 5 years, a car typically retains about 37-50% of its original value depending on make, model, and condition.
How do you calculate car depreciation?
The most common method is the straight-line method: Annual depreciation = (Purchase price - Residual value) ÷ Years of use. For a percentage-based estimate, multiply the car's current value by the depreciation rate each year (compounding). A $30,000 car depreciating at 20%/year is worth $24,000 after year 1, $19,200 after year 2, and so on.
Which cars depreciate the least?
Vehicles that historically hold value best include Toyota Tacoma, Jeep Wrangler, Porsche 911, Toyota 4Runner, and certain Subaru models. Luxury brands and electric vehicles (excluding Tesla) tend to depreciate faster. Resale demand and reliability reputation are the biggest factors.
What is the average car depreciation rate per year?
New cars depreciate approximately 15-25% in the first year and 10-15% per year after that. By year 5, most cars have lost 40-60% of their original value. Luxury vehicles and EVs (excluding Tesla) tend to depreciate faster than average.
How do I calculate my car's depreciation by model?
Depreciation varies significantly by make and model. Enter your car's original purchase price and select the annual depreciation rate specific to your vehicle type. Vehicles with strong resale demand (Toyota Tacoma, Jeep Wrangler, Honda CR-V) depreciate more slowly than average.
Which cars have the lowest depreciation?
Vehicles that historically retain value best include: Toyota Tacoma, Jeep Wrangler, Porsche 911, Toyota 4Runner, Honda CR-V, and Subaru Outback. These vehicles typically retain 50-60% of their value after 5 years.
How does a car depreciation graph work?
A car depreciation graph (or curve) shows the vehicle's value over time as a declining percentage of the original purchase price. The curve drops steeply in years 1-3 (when new car smell and warranty premium disappear) and flattens in later years.
What is a car depreciation chart?
A car depreciation chart shows a vehicle's remaining value as a percentage of its original price over time. A typical chart shows: Year 1: 80%, Year 2: 66%, Year 3: 55%, Year 4: 46%, Year 5: 40%, Year 10: 20%. These are averages — actual depreciation varies significantly by make, model, mileage, and condition.
What cars hold their value best?
Vehicles with historically strong resale value include Toyota Tacoma (holds ~67% after 5 years), Jeep Wrangler (~63%), Toyota 4Runner (~62%), Subaru Outback (~52%), and Honda CR-V (~51%). Electric vehicles vary widely — Tesla holds value relatively well while other EV brands depreciate faster due to battery concerns and rapid technology changes.