FINANCIAL · CAR DEPRECIATION
Car Depreciation Calculator
Calculate how quickly your car loses value year by year using declining-balance or straight-line depreciation, and see the total loss over your ownership period.
Value after 5 years
$13,311.16
−$16,688.84 (55.6% loss)
Initial value$30,000.00
MethodDeclining Balance
Annual rate15.0%
Total depreciation$16,688.84
Year-by-year schedule
| Year | Value (start) | Depreciation | Value (end) | Total lost |
|---|---|---|---|---|
| 1 | $30,000.00 | −$4,500.00 | $25,500.00 | 15.0% |
| 2 | $25,500.00 | −$3,825.00 | $21,675.00 | 27.8% |
| 3 | $21,675.00 | −$3,251.25 | $18,423.75 | 38.6% |
| 4 | $18,423.75 | −$2,763.56 | $15,660.19 | 47.8% |
| 5 | $15,660.19 | −$2,349.03 | $13,311.16 | 55.6% |
About This Calculator
See how much your car loses in value each year. Enter the purchase price, depreciation rate (or straight-line schedule), and ownership horizon to get a year-by-year breakdown of your vehicle's remaining value.
How It Works
Choose a depreciation method and enter your car's initial value, expected annual rate (for declining balance), or residual salvage value (for straight-line). The calculator builds a year-by-year schedule showing the starting value, depreciation amount, and ending value for each year of your ownership period.
The Formula
Value_n = P × (1 − r)^n
- P
- Initial vehicle value (purchase price)
- r
- Annual depreciation rate (as a decimal)
- n
- Year number in the ownership period
Frequently Asked Questions
- What depreciation rate should I use?
- New cars typically depreciate 15–25% per year using the declining-balance method. The first year often sees the steepest drop (new-car premium loss). A rate of 15–20% is a reasonable starting point for most vehicles; luxury and sports cars may depreciate faster, while trucks and popular SUVs may hold value better.
- What is the difference between declining balance and straight line?
- Declining balance mirrors real-world resale values more closely — a car loses a larger fraction of its value in early years and less in later years. Straight-line spreads the loss equally each year, which is simpler but less realistic for most vehicles.
- Does this calculator account for mileage or condition?
- No. The calculator applies a uniform rate across all years. Actual resale value depends on mileage, condition, market demand, and trim level. Use resources like Kelley Blue Book or Edmunds for a condition-adjusted estimate.
- How does depreciation relate to a car loan?
- If your car depreciates faster than you pay down the loan principal, you may be "underwater" (owe more than the car is worth). Comparing the depreciation schedule with the auto loan amortization helps you identify that risk.