How fast do cars depreciate?

A new car often loses around 15% to 20% of its value each year, with the biggest drop in the first year. Used cars depreciate more slowly. The exact rate depends on the make, condition, mileage, and demand, so treat the result as a guide.

What is the declining balance method?

Declining balance applies the depreciation rate to the value left each year, not the original price. So the dollar loss is largest at the start and shrinks as the car ages, which matches how real vehicle values behave.

Why does depreciation matter?

Depreciation is usually the biggest cost of owning a car, often more than fuel or servicing. Knowing the likely resale value helps you compare cars, decide when to sell, and understand the true cost of buying new versus used.

Car Depreciation Calculator

This calculator shows how much value your car is likely to lose over time and what it will probably be worth at the end of the period you choose. Depreciation is usually the single biggest cost of owning a car, often outweighing fuel, servicing and insurance combined, so understanding how quickly a vehicle's value falls can make a real difference when you are deciding whether to buy new or used, how long to keep a car, or when to sell before the losses get too steep. Enter the purchase price, an annual depreciation rate as a percentage, and the number of years you want to project, and the calculator applies the declining balance method, which reduces the value left each year rather than the original price, so the dollar loss is largest in the first year and gradually shrinks as the car ages, matching how real vehicle values behave. You get back the estimated value at the end of the period, the total dollar amount lost, the first year loss on its own, and a full year by year table showing the value and the amount lost in every year. Because actual depreciation depends on the make and model, condition, mileage, market demand and how well the car is maintained, treat the results as a useful planning guide rather than an exact resale valuation.

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Purchase price

Depreciation per year

Years

estimated value after the period

Total lost$0

First year loss$0

Year by year value

End of year	Value	Lost that year

How it works

The declining balance method multiplies the value left at the start of each year by the depreciation rate. So a car worth $35,000 losing 18% drops $6,300 in the first year to $28,700, then loses 18% of $28,700 the next year, and so on. The dollar loss shrinks each year even though the rate stays the same.

Related calculators

Depreciation Calculator: straight line and diminishing value.
Car Loan Calculator: finance repayments.
Fuel Cost Calculator: running cost by distance.
Rent vs Buy Calculator: compare ownership costs.

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