Buying & Finance · Free tool
Free Car Depreciation Calculator
Enter what you pay, how old the car is and how long you will keep it. The calculator estimates its value at the end of each year.
- Free to use
- No signup
- Runs in your browser
The car
Depreciation rates
Experian: a new car loses about 20% in year one.
15.9% a year leaves about 40% of the price after five years.
Estimated value after 5 years
$12,006
40% of what you paid.
- Total depreciation
- $17,994
- Average per year
- $3,599
- Average per month
- $300
- Per mile driven
- $0.30
A projection from the two rates you set. Mileage, condition, model and the used car market all move the real figure.
Value at the end of each year
- Year 1$24,000− $6,000
- Year 2$20,184− $3,816
- Year 3$16,975− $3,209
- Year 4$14,276− $2,699
- Year 5$12,006− $2,270
An estimate from the figures you enter, not a quote. Read the disclaimer. Updated .
02Your result
What your car depreciation result means
Depreciation is the money you never see leave. For most new cars it is the largest cost of ownership.
- 01
Value at the end
An estimate of what the car will be worth when you plan to sell it. It is a projection, not an appraisal.
- 02
Total depreciation
The difference between what you pay and what the car is worth later. Divide it by years, months or miles to compare cars.
- 03
The shape of the curve
The bars fall fastest at the start. Buying a car that is two or three years old skips the steepest part.
What to do next
Add the other costs
Put depreciation together with fuel, insurance, maintenance and interest.
Ownership cost calculatorCompare with a lease
A lease payment is mostly depreciation. See what the same car costs to lease.
Car lease calculatorDecide when to sell
How to time a sale or a trade-in around the value curve.
Sell or trade in
03How it works
The car depreciation formula
The calculator uses declining-balance depreciation: each year the car loses a percentage of what it was worth at the start of that year.
Vn = V0 × (1 − d1) × (1 − d)^(n−1)
For a car bought used, the first-year factor has already been paid by someone else, so Vn = V0 × (1 − d)^n.
What each term means
- V0
- The price you pay.
- Vn
- The estimated value after n years of ownership.
- d1
- The rate for a car's first year on the road. The default is 20%.
- d
- The rate for every later year. The default is 15.9%.
- n
- The number of years you keep the car.
What the tool assumes
- The same percentage applies every year after the first.
- Average mileage and condition. High mileage or damage lowers the real value.
- No allowance for model, brand or changes in the used car market.
- The first-year rate applies only when you buy the car new.
04Worked example
Car depreciation example: a $30,000 car over five years
A new $30,000 car, losing 20% in its first year and 15.9% in each year after that.
- 01
End of year 1
$30,000 × (1 − 0.20)
$24,000
- 02
End of year 2
$24,000 × (1 − 0.159)
$20,184
- 03
End of year 3
$20,184 × (1 − 0.159)
$16,975
- 04
End of year 4
$16,975 × (1 − 0.159)
$14,276
- 05
End of year 5
$14,276 × (1 − 0.159)
$12,006
Value after five years
$12,006
The car has lost $17,994, or $3,599 a year. Bought at two years old for $20,184 and kept three years, it would lose $8,178 instead.
Try your own numbers05Background
How car depreciation works
Depreciation is the fall in a car’s value as it ages and gathers miles. It is steepest at the start. Experian’s summary is that a new car loses about 20% of its value in the first year, and that after five years the average car is worth around 40% of what it sold for.
- lost in the first year
- 20%
- of the price left after five years
- 40%
- AAA's average yearly depreciation on a new car, 2026
- $4,422
The calculator’s default for later years, 15.9% a year, is the rate that connects those two figures: it takes a car from 80% of its price after one year to 40% after five. You can change both rates to match a model that holds its value better or worse.
Depreciation is also the largest single item in AAA’s 2026 breakdown of new car ownership costs, ahead of fuel and insurance. That is the case for buying at two or three years old: the first owner has absorbed the steepest part. See when to sell or trade in for how to use the curve.
06When to use it
When to use a car depreciation calculator
It answers one question a price tag cannot: what will this car cost me to own, apart from running it?
New or nearly new
Compare the same model bought new and bought at two or three years old.
To plan when to sell
See how much value each extra year of ownership costs.
Buy or lease
Check a lease’s residual value against your own estimate of the car’s worth.
To check a loan
Compare the value curve with your loan balance to see when you would owe more than the car is worth.
Mistakes to avoid.
- Treating the estimate as a valuation. A real offer depends on mileage, condition and the market that week.
- Applying the first-year rate to a car that is already used.
- Ignoring depreciation because it is not a monthly bill.
- Comparing two cars on price alone when one holds its value far better.
07Related guides and tools
Keep going from here.
Guides that go with this tool
Related tools
08Questions
Car Depreciation Calculator: your questions.
How much does a car depreciate per year?
A new car loses about 20% of its value in the first year, and after five years the average car is worth around 40% of its original price, according to Experian. That works out at roughly 15.9% a year from the second year on.
How do you calculate car depreciation?
Multiply the car’s value by one minus the yearly depreciation rate, and repeat for each year. For a new car, use the higher first-year rate once and the lower rate for every year after it.
What will a $30,000 car be worth in five years?
Using a 20% first-year rate and 15.9% a year after that, a $30,000 new car is worth about $12,006 after five years. The real figure depends on the model, mileage and condition.
Do used cars depreciate more slowly?
Yes, in percentage terms a car loses value fastest when new. A used car has already been through its steepest year, so each further year costs less.
Does mileage affect depreciation?
Yes. The calculator assumes average use. A car with high mileage for its age is worth less than the estimate, and one with low mileage is worth more.
09Estimates and sources
Read this before you rely on it.
Built and checked by CarTipsMentor Team. Last updated . How we check our work.
Sources
- [1]Experian, What Is Car Depreciation?
- [2]AAA, Your Driving Costs 2026 (brochure)