AutoMath
The car itself

Car Depreciation Calculator

Project a vehicle's resale value year by year — including the year-one cliff and the slower retention after — so you can time a sale or judge new versus used.

Your numbersSaved on this device only

Defaults reflect a typical mainstream car. Trucks and strong-resale brands hold more; luxury and many EVs drop faster — adjust to your model's history.

📉 Value after 7 years

$12,069

30% retained · $27,931 lost

Value by year
  • Yr 1$32,000
  • Yr 2$27,200
  • Yr 3$23,120
  • Yr 4$19,652
  • Yr 5$16,704
  • Yr 6$14,199
  • Yr 7$12,069
Total depreciation
$27,931
Avg / year
$3,990

What this computes

Depreciation is the largest cost of owning a car and the only one that never sends an invoice. This projects the value curve explicitly: a steep first year, a gentler decline after, and the resale figure at any horizon — the number the True Cost of Ownership calculator needs.

The math

after year 1   = price × (1 − firstYearDrop)
each later year  value ×= (1 − annualDrop)
retained %     = value / price

A declining-balance model with a distinct first-year rate. The two rates together encode brand and segment retention — calibrate them to your model's real used-value history.

You pay for the word "new" once, entirely in year one, and it is the most expensive word in the transaction.

How to use this

  1. Calibrate to your model. Look up real used prices at 1, 3, and 5 years and tune the two rates to match.
  2. Project new vs used. Run the same car bought new and at 2-3 years old — the used curve skips the cliff.
  3. Time your sale. The flattening curve means the marginal year of ownership gets cheaper; the worst time to sell is right after the cliff.
  4. Feed it forward. Use the horizon value as the resale input in True Cost of Ownership and Lease vs Buy.

The year-one cliff

The first year is categorically different from the rest:

  • Status, not wear. The drop happens regardless of mileage — it's the loss of "new car" pricing power.
  • It's front-loaded by design. No later year comes close in absolute dollars on a typical curve.
  • It's the used-car case in one number. Whoever owns the car through year one pays for it; buying after means you don't.

What this calculator doesn't model

  • Mileage and condition. Time-based curve only; heavy mileage depreciates faster than modeled.
  • Market shocks. Fuel-price swings, supply shortages, and model redesigns move used values non-smoothly.
  • Options and trim. Different trims retain value differently; this models a single line.
  • Total ownership cost. Depreciation is one component — see True Cost of Ownership.

Frequently asked questions

How fast does a car depreciate? +
Most mainstream new cars lose roughly 15-25% of value in the first year and then about 10-18% of the remaining value each year after, retaining somewhere around 35-50% after five years. The curve is steep early and flattens later, which is why this calculator uses a separate, larger first-year rate before applying the annual rate.
Why is the first year so much worse? +
A car stops being 'new' the moment it's titled, and the new-car buyer pool won't pay used prices. That status loss is concentrated entirely in year one, independent of mileage or condition. It's the single biggest, most predictable cost of buying new — and the core argument for buying lightly used.
What affects how well a car holds value? +
Brand and segment reputation, reliability record, fuel type, supply/demand, trim and options, mileage, and condition. Trucks and certain brands are known for strong retention; luxury sedans and many EVs depreciate faster (technology turnover and battery concerns). Adjust the two rate inputs to match real used-value data for your specific model.
Does mileage or condition change the result? +
Yes, in reality — high mileage and poor condition accelerate depreciation beyond the time-based curve. This calculator models the time-and-status curve; treat its output as the baseline for an average-mileage, well-kept example and adjust the annual rate upward if you drive a lot.
How do I use this when deciding new vs used? +
Project the same model bought new versus bought at 2-3 years old. The used car skips the year-one cliff entirely, so its value curve over your ownership period is far flatter — usually the decisive factor in the True Cost of Ownership comparison.
Is this exact? +
No — it's a transparent model, not a market quote. Real depreciation is lumpy and model-specific. AutoMath is an educational tool; calibrate the rates with actual used-value data for your vehicle for a realistic projection.

Related calculators

  • True Cost of Ownership — depreciation in context of every other cost.
  • Lease vs Buy — resale value is the swing factor there too.
  • Auto Loan — how fast you build equity vs how fast value falls.
  • New vs Used — what the first owner's depreciation is worth to you as the second one.

The winners and losers: which cars hold their value best, and why the first year costs the most.

AutoMath is an educational tool. The numbers above depend entirely on assumptions you provide and are not financial advice.