Car Depreciation Calculator
The largest cost of car ownership.
Car Depreciation Calculator
Value = price × (1 − annual rate)^years, never below the salvage floor
Calculated instantly
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What This Calculator Does
The Car Depreciation Calculator projects what a vehicle will be worth after a chosen number of years, using a declining-balance rate and an optional minimum value. It also shows the total loss, the average monthly cost of that loss, and the share of the purchase price that remains.
How It Works
Each year, the car loses a fixed percentage of its current value, not of its original price. That is declining-balance depreciation: a 15% rate removes 15% of the first-year value, then 15% of what is left, and so on. The value is never allowed to fall below the salvage floor, which represents scrap or trade-in value.
Example
A $30,000 car depreciating at 15% a year is worth $25,500 after one year, $21,675 after two, and about $13,311 after five. That is $16,689 of value gone, or roughly $278 a month over the period, with 44% of the original price retained.
Formula
value = price × (1 − rate)^yearsloss = price − valuemonthly = loss ÷ years ÷ 12retained% = value ÷ price × 100Reading the Results
Value after ownership period
The projected resale or trade-in value. Treat it as a planning estimate, not a quote: condition, mileage, demand, and local market all move the real number.
Average loss per month
The depreciation spread evenly across the ownership period. It is useful for comparing a new car with a used one, or a lease with a purchase.
Sources and References
IRS Publication 946 — How to Depreciate Property
Declining-balance depreciation methods
Explains the declining-balance method that this calculator applies, including salvage-value treatment.
US Bureau of Labor Statistics — CPI Used Cars and Trucks
Market price movement for used vehicles
A public check on how used-vehicle prices actually move over time.
AAA — Your Driving Costs
Depreciation as a share of ownership cost
Shows why depreciation is usually the largest single cost of new-car ownership.
References identify the method or data behind this calculator. Where a standard or tariff changes, the current edition applies, and the assumptions stated above take precedence over a remembered figure.
Frequently Asked Questions
What is a realistic depreciation rate?
A new car commonly loses 15–25% in the first year and 8–12% a year after that. Luxury, electric, and high-volume models can be steeper; sought-after trucks and limited-run cars can be gentler. The calculator lets you use whichever rate fits your case.
Is depreciation the same as resale value?
No. Depreciation is the loss in value; resale value is what remains. A car that drops 40% in three years has a 60% resale value, before any adjustment for mileage or condition.
Why does the first year hurt so much?
Because the moment a new car is registered it becomes a used car, and the next buyer expects a used-car price. The steepest part of the curve is the first few months, which is why a one- or two-year-old car is often the better value.
Should I use straight-line or declining-balance?
Declining balance is closer to how vehicles actually lose value, because the same percentage of a shrinking number produces a large early loss and smaller later ones. Straight-line, an equal amount each year, understates the first-year hit.