Loans
Car Depreciation Calculator
A car is a depreciating asset — it loses value every year, fastest at the start. Enter the price and an annual depreciation rate to project the car's value over time and see how much of your purchase the loss in value costs you.
New cars often lose ~20% the first year and ~15%/yr after; varies widely by model.
Estimated value
$13,311
After 5 years.
- Value lost
- $16,689
- Share of value kept
- 44.37%
- You paid
- $30,000
Value by year
| Year | Value |
|---|---|
| 1 | $25,500 |
| 2 | $21,675 |
| 3 | $18,424 |
| 4 | $15,660 |
| 5 | $13,311 |
How this calculator works
Value each year = purchase price × (1 − depreciation rate)^year, a standard declining-balance model. Value lost is the price minus the final value; share kept is final value ÷ price.
A single constant rate is a simplification — real depreciation is steepest in year one and varies by make, model, mileage, condition, and market. Use it as an estimate and check model-specific resale data for a specific car.
Try an example
Frequently asked questions
How fast does a car depreciate?
A typical new car loses around 20% of its value in the first year and roughly 15% a year after that, so it can be worth about half its price after five years. Rates vary widely — luxury cars and EVs often depreciate faster, while some trucks and reliable models hold value better.
Why do new cars lose value so fast?
The steepest drop happens the moment you drive off the lot, because the car instantly becomes 'used' and loses the new-car premium. Depreciation then slows each year as the remaining value shrinks. This front-loaded curve is why buying a 2–3 year old car can be much cheaper than buying new.
How can I reduce depreciation's cost?
Buy models known to hold value, keep mileage moderate, maintain the car well, and keep it longer so you spread the loss over more years. Buying slightly used lets someone else absorb the worst first-year drop. Depreciation is usually the single biggest cost of car ownership — bigger than fuel or repairs.
Does depreciation matter if I'm not selling?
Yes — it's a real cost even if you keep the car, because it's wealth tied up in an asset that's steadily shrinking. It also affects your insurance payout if the car is totaled and how much equity you have if you still owe on a loan. Being 'underwater' happens when the loan balance exceeds the depreciated value.
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Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.