Car Depreciation Calculator
Project your car's resale value year by year using typical depreciation curves for new and used vehicles.
What this calculates
New cars lose value fast — typically 20 % the moment you drive off the lot and another ~15 % per year for the first few years. This calculator projects your car's value year by year using either an industry-standard curve or a custom rate, so you can plan a sale, factor in total ownership cost, or decide whether to lease vs buy.
Formula & how it works
Value at year n = purchase_price × (1 − year_1_depreciation) × (1 − annual_depreciation)^(n−1). Industry averages: 20 % first year (heavier loss for luxury), 15 % year 2–3, 10 % year 4+, plateauing around 30 % of original by year 10. Total 5-year loss typically 50–60 % of MSRP for most mainstream brands; less for trucks and a few brands like Toyota Tacoma.
Worked example
$40,000 new car, 20 % first-year drop, 15 % annually after. Year 1: $32,000. Year 3: $32K × 0.85² = $23,120. Year 5: $32K × 0.85⁴ = $16,710. After 5 years you've lost $23,290 — bigger than most people's annual savings rate.
Frequently asked questions
Which cars depreciate slowest?
Trucks (especially Toyota Tacoma, Tundra). Some performance cars (Porsche 911). Reliable Japanese brands (Toyota, Lexus, Honda). Worst depreciators: luxury sedans (Mercedes, BMW, Audi), electric vehicles (improving but still high), and high-MSRP brands.
Why is 'drive off the lot' loss so dramatic?
Once registered, the vehicle becomes 'used' and loses the new-car premium buyers pay. Dealer profit margin (typically 5-10 %) also doesn't come back. CPO programs reduce but don't eliminate this.
Does depreciation matter if I keep the car forever?
Less. Total cost of ownership over 15 years averages out and depreciation becomes a smaller annual cost. Long ownership beats trading frequently every time.
How accurate are these projections?
Within ±20 % for typical vehicles. Real value depends on mileage, condition, region, color, fuel prices, and trim. Use KBB or Edmunds for specific vehicle estimates.