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Car Depreciation Calculator

See what your car will be worth down the road.

How it is calculated

The tool uses compound (declining-balance) depreciation: value = price × (1 − rate/100)years, where price is the starting value in dollars, rate is the percentage lost each year and years is the holding period. Each year's loss is a percentage of what the car is worth at that point, not of the original price. Total depreciation is simply price − value. If you leave the rate empty, the tool assumes 15% per year. The price must be above zero and years cannot be negative; years may be fractional (2.5 works). The rate is one flat figure for every year, so it will not reproduce a steeper first-year drop unless you pick a higher average rate. Results are in dollars with two decimals.

Worked example

A car bought for $25,000 that loses 15% a year, kept for 3 years. The yearly multiplier is 1 − 0.15 = 0.85. After three years: 0.853 = 0.614125. Resale value: 25,000 × 0.614125 = $15,353.13. Total depreciation: 25,000 − 15,353.13 = $9,646.88. Note that this is less than the $11,250 you would get from a flat 15% of the original price every year, because each year's loss is smaller than the last.

Try this example →

Common mistakes

  • Expecting the straight-line result (rate × years × price). This tool compounds, so three years at 15% is 38.6% lost, not 45%.
  • Entering the rate as a decimal such as 0.15; the field expects a percentage, so 15.
  • Using one low average rate for a car whose first year is much steeper than later ones; the estimate will then be too high for early resale and too low later.
  • Leaving the rate blank without noticing: the tool silently uses 15%, which may not suit your model.
  • Entering the current market value as the price but counting years from the original purchase date; price and years must refer to the same starting point.

About this calculator

Cars lose value on a predictable curve rather than a straight line: the steepest drop happens in the first year (often 15–25% of the purchase price), with the rate slowing in later years, which is why depreciation calculations typically use a declining-balance method — applying a percentage loss to the remaining value each year rather than a flat percentage of the original price. A car's make, model, mileage, condition and market demand all shift the actual annual rate up or down from the general curve, but the compounding pattern (percentage of what's left, not of the original price) holds across virtually every vehicle.

Car buyers use depreciation estimates to compare the true cost of ownership between models before purchasing (a car that's cheap to buy but depreciates fast can cost more overall than a pricier car that holds value); lenders and lessors use depreciation curves to set loan-to-value ratios and lease residual values; and insurance adjusters reference depreciation when calculating a vehicle's actual cash value after a total-loss claim.

Start from the car's value, apply a yearly depreciation rate for the number of years you plan to keep it, and you see the projected resale value and how much it lost, a realistic figure for a purchase, trade-in or budget.

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