How Car Depreciation Works
Understand how car depreciation works, why cars lose value, and how to estimate depreciation for your vehicle.
Understanding Car Depreciation
Depreciation is the decrease in a car's value over time. It's typically the largest cost of car ownership, often exceeding fuel, insurance, and maintenance combined.
How Depreciation Works
New cars: Lose 20-30% of value in the first year, then 15-20% annually
Used cars: Depreciate slower, typically 10-15% per year
After 5 years: Most cars retain 30-50% of original value
Factors Affecting Depreciation
- Mileage: Higher mileage = lower resale value
- Brand reputation: Luxury brands often depreciate faster
- Vehicle condition: Accidents and poor maintenance reduce value
- Market demand: Popular models hold value better
- Age: Older cars depreciate slower but have lower absolute value
Depreciation Models
Different models estimate depreciation:
- Simple Annual Percent: Fixed percentage loss each year
- First Year Drop + Annual: Accounts for larger first-year loss
- Fixed Resale Value: Based on known future resale value
Calculate Your Car's Depreciation
Use our Car Depreciation Calculator to estimate how much your car will depreciate over time.
Try the Calculator
Car Depreciation Calculator – Estimate Resale Value Over Time
Estimate your car's resale value and depreciation over time. See yearly value breakdown and total loss in value.
How to: Enter the purchase price of the car
Car Resale Value Calculator – Estimate What Your Car Will Be Worth
Estimate your car's resale value in future years using depreciation, condition, and mileage assumptions.
How to: Enter your car's current value (or purchase price if you prefer)
Car Cost of Ownership Calculator – True Cost of Owning a Car
Calculate the true cost of owning a car including depreciation, fuel, insurance, maintenance, and all expenses over time.
How to: Enter the purchase price of the car