How much does a car depreciate per year?

A typical new car loses around 15–20% of its value each year, with the biggest drop in the first year (often 20% or more). After five years many cars are worth roughly 40% of their original price. Luxury and EV depreciation can be faster; trucks and some hybrids hold value better.

How is car depreciation calculated?

This calculator uses compounding: each year the value is multiplied by (1 − annual rate). For example, a $35,000 car depreciating 15% a year is worth about $35,000 × 0.85⁵ ≈ $15,500 after five years.

Why does depreciation matter?

Depreciation is usually the single biggest cost of owning a car — often more than fuel or maintenance. Knowing the resale value helps you compare lease vs buy, plan when to sell, and estimate your true cost of ownership.

Car Depreciation Calculator

Estimate what your car will be worth down the road and how much value it loses each year.

Purchase price

Depreciation / year

Years

Estimated value after 5 years

$15,529.69

Value lost: $19,470.31
Retained: 44%
Avg loss / yr: $3,894.06

Year 1: $29,750.00
Year 3: $21,494.37
Year 5: $15,529.69

How to use this calculator

Enter what you paid (or the current value), the annual depreciation rate (15% is a common default) and how many years to project. The calculator shows the estimated future value, total value lost, and a year-by-year breakdown.

Frequently asked questions

How much does a car depreciate per year?: A typical new car loses around 15–20% of its value each year, with the biggest drop in the first year (often 20% or more). After five years many cars are worth roughly 40% of their original price. Luxury and EV depreciation can be faster; trucks and some hybrids hold value better.
How is car depreciation calculated?: This calculator uses compounding: each year the value is multiplied by (1 − annual rate). For example, a $35,000 car depreciating 15% a year is worth about $35,000 × 0.85⁵ ≈ $15,500 after five years.
Why does depreciation matter?: Depreciation is usually the single biggest cost of owning a car — often more than fuel or maintenance. Knowing the resale value helps you compare lease vs buy, plan when to sell, and estimate your true cost of ownership.

Car Depreciation Calculator

How to use this calculator

Frequently asked questions

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