Car Depreciation Calculator
Example: Purchase price: 35000 $ · Annual depreciation rate: 15 % · Years to project: 5 years
| Estimated future value | $15,530 |
| Total value lost | $19,470 |
| Percent of value lost | 55.63% |
Worked example
A $35,000 car losing 15% of its remaining value each year is worth about 35,000 times 0.85 to the fifth power after five years, or roughly $15,530. That is about $19,470 of value gone, close to 56% of what you paid. The steepest drop happens in year one, which is why buying a lightly used car and letting someone else absorb that first-year hit is a classic money-saving move.
Frequently asked questions
What depreciation rate should I use?
Many new cars lose roughly 15 to 20% per year on a declining-balance basis, with the first year often the worst. Trucks and some SUVs hold value better; luxury sedans and EVs can depreciate faster. Look up your specific model if you can, and run a couple of rates to bracket the outcome.
Why is the first year the most expensive?
A car loses a big chunk of value the moment it is titled and driven off the lot, and depreciation is heaviest in the first two to three years. This is why buying a two- or three-year-old vehicle can capture most of a car life at a fraction of the depreciation.
Does this use straight-line or declining-balance depreciation?
This tool uses declining balance, applying the percentage to the remaining value each year, which better matches how real car values fall. Straight-line would overstate the loss in later years.
How does depreciation affect my real cost of ownership?
Depreciation is usually the single largest ownership cost, bigger than fuel or maintenance for the first several years. Subtracting the projected resale value from your purchase price gives the true cost of the years you drove it.