Car Depreciation Calculator
See your car’s projected value year-by-year and how much equity you lose — plan resale timing to minimize loss.
Car Depreciation Calculator
Year-by-year value projection
How It Works
The calculator uses a declining-balance depreciation model — each year’s depreciation is applied to the remaining value, not the original price. This better reflects real-world depreciation.
How to Use This Calculator
- Enter the vehicle’s purchase price.
- Enter the expected annual depreciation rate (15% for average; 10% for slow-depreciating vehicles).
- Enter the number of years to project.
- Click Calculate — a year-by-year table appears.
- Identify the year where depreciation stabilizes — often the best time to resell.
Worked Example
Reference Table
| Vehicle Type | Year 1 Dep. | Year 3 Value | Year 5 Value |
|---|---|---|---|
| Luxury sedan (new) | 25–30% | 45–55% of MSRP | 30–40% |
| Mainstream new car | 20–25% | 55–65% | 40–50% |
| Used car (3yr old) | 10–15% | 70–80% | 55–70% |
| Pickup truck | 15–20% | 65–75% | 55–65% |
| Plug-in EV (varies) | 20–40% | 40–60% | 30–55% |
| Classic car (appreciating) | −3 to −10% | +9–30% | +16–61% |
Frequently Asked Questions
Why does declining-balance depreciation give different results from straight-line?
Straight-line depreciation removes the same dollar amount each year (e.g., $3 000/year). Declining-balance removes the same percentage of the current value — faster early on, slower later. Declining-balance more accurately reflects how cars actually lose value.
What depreciation rate should I use for a used car purchase?
A used car past its initial steep drop (3–4 years old) typically depreciates 10–15% per year. Well-maintained Japanese vehicles (Toyota, Honda) often hold value better — use 8–12%. German luxury vehicles may depreciate 15–20% even after purchase.
Can a car ever appreciate in value?
Yes — collector, classic, and limited-production vehicles often appreciate. Certain modern sports cars (Porsche GT models, early EV editions) have also appreciated. However, ordinary transportation vehicles almost universally depreciate.
When is the best time to sell a car to minimize depreciation loss?
The steepest depreciation occurs in years 1–3. Selling just before a major service interval (before the next timing belt or large-cost service) can also maximize value. Generally, years 3–5 represent a reasonable balance of depreciation absorbed vs remaining reliable life.
