New cars lose value fastest in the first year (often 15–25%) and typically keep about 40% of their value after five years. Brand, mileage, condition and demand all matter – trucks and some Japanese brands hold value better than luxury sedans and EVs.
How to use the Car Depreciation Calculator
- Purchase price
- Age of the car
- First-year depreciation
- Yearly depreciation after year 1
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the purchase price, the car’s age (or years ahead) and the depreciation rates.
Tips
- Use your real spending from bank statements rather than guesses.
- Automate savings so they happen before you spend.
- Revisit your plan once a year or after any big life change.
- Keep an emergency fund before investing for long-term goals.
Common mistakes to avoid
- Underestimating irregular expenses such as car repairs, gifts and annual bills.
- Ignoring inflation for long-term goals.
- Taking on high-interest debt to fund wants.
Inputs explained
| Field | What to enter |
|---|---|
| Purchase price | Amount in your currency |
| Age of the car | In years |
| First-year depreciation | In % |
| Yearly depreciation after year 1 | In % |
What each result means
- Total depreciation = [Purchase price] – [Estimated current value]
- Value lost = [Total depreciation]÷[Purchase price]×100
Example values
How the main result changes when Purchase price changes and everything else stays at the example values above:
| Purchase price | Estimated current value |
|---|---|
| 20,000 | 8,352.1 |
| 30,000 | 12,528.15 |
| 40,000 | 16,704.2 |
| 50,000 | 20,880.25 |
| 60,000 | 25,056.3 |
| 80,000 | 33,408.4 |
Formula
Value after year 1 = price × (1 − first-year rate)Value after n years = price × (1 − first-year rate) × (1 − yearly rate)^(n − 1)Depreciation = price − valueWorked example
Inputs — Purchase price: $40,000; Age of the car: 5 years; First-year depreciation: 20 %; Yearly depreciation after year 1: 15 %.
Results — Estimated current value = $16,704.20; Total depreciation = $23,295.80; Value lost = 58.24 %; Average depreciation per year = $4,659.16.
Frequently asked questions
How much does a car depreciate per year?
Roughly 15–25% in year one and about 15% a year after that.
Which cars hold their value best?
Pickup trucks, sports cars and reliable Japanese models.
How can I reduce depreciation?
Buy slightly used, keep mileage low and maintain the car well.
What formula does the Car Depreciation Calculator use?
Value after year 1 = price × (1 − first-year rate).