Car Depreciation Calculator
See how your car's value declines over 10 years. Enter the purchase price, current age, and annual mileage to view year-by-year depreciation with a realistic curve.
Quick Answer
A new car loses roughly 20% of its value in the first year, another 15% in year two, and about 10% per year for years three through five. After five years, a car is worth approximately 40% of its original price. By year ten, most vehicles retain 20-25% of their original value. Buying a 2-3 year old car avoids the steepest depreciation.
Year-by-Year Value
| Year | Value | Dep. Rate | Annual Loss | Total Miles |
|---|---|---|---|---|
| Year 1 | $28,000 | 20% | -$7,000 | 12,000 |
| Year 2 | $23,800 | 15% | -$4,200 | 24,000 |
| Year 3 | $21,420 | 10% | -$2,380 | 36,000 |
| Year 4 | $19,278 | 10% | -$2,142 | 48,000 |
| Year 5 | $17,350 | 10% | -$1,928 | 60,000 |
| Year 6 | $15,962 | 8% | -$1,388 | 72,000 |
| Year 7 | $14,685 | 8% | -$1,277 | 84,000 |
| Year 8 | $13,657 | 7% | -$1,028 | 96,000 |
| Year 9 | $12,701 | 7% | -$956 | 108,000 |
| Year 10 | $12,066 | 5% | -$635 | 120,000 |
About This Tool
The Car Depreciation Calculator projects your vehicle's value decline over 10 years using a realistic depreciation curve. New cars lose value fastest in the first two years, with depreciation slowing gradually as the vehicle ages. The model uses average industry depreciation rates: 20% in year one, 15% in year two, 10% for years three through five, and 5-8% for years six through ten.
Why Cars Depreciate
Depreciation reflects the difference between a new car and a used car in the market's eyes. A new car becomes "used" the moment you drive it off the lot. After that, wear and tear, mileage accumulation, model year aging, and the availability of newer models all contribute to declining value. Supply and demand dynamics also play a role: popular, reliable models hold value better than oversupplied or less reliable ones.
The Best Time to Buy
Because the steepest depreciation happens in years one and two, buying a vehicle that is 2-3 years old captures the largest savings. A car originally priced at $35,000 is worth roughly $23,800 after two years, representing $11,200 in depreciation that the first owner absorbed. The vehicle still has most of its useful life remaining with modern reliability. Certified pre-owned programs from manufacturers add warranty protection that further reduces the risk.
Factors That Slow Depreciation
Some vehicles hold value exceptionally well. Toyota and Lexus consistently rank highest in resale value. Trucks and SUVs in high demand (like the Toyota Tacoma or Jeep Wrangler) can retain 60-70% of their value after five years. Low mileage, meticulous maintenance records, desirable colors, and popular option packages all contribute to slower depreciation. Electric vehicles have historically depreciated faster, though this is changing as the market matures.
Frequently Asked Questions
How much does a new car depreciate in the first year?
What cars depreciate the least?
How does mileage affect depreciation?
Do electric cars depreciate faster than gas cars?
Is it better financially to buy used?
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