Car depreciation calculator
Expected value of a car after some years.
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How it's calculated
Cars lose value fastest in the first year, when they stop being new, and then at a steadier percentage of the remaining value each year. The model here takes a first-year drop and a yearly drop after that: value after n years is the new price times (1 − first drop) times (1 − yearly drop) to the power of n − 1. With the defaults a $35,000 car is worth about $28,000 after one year, $20,000 after three and $14,600 after five, so it has lost 58% of its price. The difference between today’s value and the future one is what owning the car for those years costs in depreciation alone.
How much does a new car depreciate in the first year?
About 20% on average, with a wide range: 10–15% for in-demand trucks and reliable brands, 30% or more for luxury sedans and many EVs whose prices were cut. By year five the average car has lost about 60% of its price.
Which cars hold their value best?
Trucks and body-on-frame SUVs (Toyota Tacoma, 4Runner, Jeep Wrangler), sports cars with a following (Porsche 911, Corvette), and reliable mainstream brands (Toyota, Honda, Subaru). Worst are luxury sedans, large EVs and anything with a reputation for repair bills. Enter a first-year drop of 10–12% for the best and 30–35% for the worst.
Is it cheaper to buy a two- or three-year-old car?
Usually, yes: someone else has paid the steep first years. A three-year-old car on the defaults has lost about 42% and will lose another 15% a year, so your depreciation per year is roughly half what the first owner paid. Set the age to 3 and compare the per-year figure with age 0.
Results are estimates for informational purposes only and are not financial, medical or legal advice.