Car Depreciation Calculator
See how your vehicle loses value year by year. Enter the purchase price, number of years, and annual depreciation rate.
Average Depreciation by Vehicle Type
| Vehicle Type | Year 1 Loss | Year 3 Value | Year 5 Value |
|---|---|---|---|
| Economy sedan | 15–20% | 55–65% | 40–50% |
| Luxury sedan | 20–30% | 40–50% | 25–35% |
| Pickup truck | 12–18% | 60–70% | 45–55% |
| SUV (mid-size) | 15–22% | 55–65% | 40–52% |
| Sports car | 15–25% | 50–60% | 35–48% |
Values shown as % of original purchase price. Varies by make, model, mileage, and market conditions.
Frequently Asked Questions
How fast do cars depreciate?
New cars typically lose 15–25% of their value in the first year alone, and around 50–60% over the first five years. The steepest drop occurs immediately after purchase — a new car can lose 10–15% the moment you drive off the lot. After 5 years, depreciation typically slows to 5–15% annually as the car approaches its stable used market value.
Which cars depreciate the least?
Vehicles with the best depreciation (highest residual value after 5 years) include Toyota Tacoma, Jeep Wrangler, Toyota 4Runner, Honda Civic, and Toyota Corolla. Luxury vehicles like BMW and Mercedes-Benz typically depreciate faster. Trucks and SUVs with strong demand generally hold value better than sedans.
How does depreciation affect a car loan?
If your car depreciates faster than you pay down your loan, you become 'underwater' — owing more than the car is worth. This is especially risky if you total the car — insurance pays market value, not what you owe. GAP insurance covers this difference. Making a larger down payment or choosing shorter loan terms reduces this risk.
What is the best age to buy a used car to avoid depreciation?
Buying a car that is 2–4 years old offers the best balance: the original buyer has absorbed the steepest depreciation (20–40% off MSRP), yet the car still has plenty of life and may still be under warranty. A 3-year-old lease return in good condition often represents excellent value.
Does mileage affect depreciation more than age?
Both matter, but mileage is often weighed heavily. Industry standard is about 12,000–15,000 miles per year. High mileage (20,000+ miles/year) accelerates depreciation and reduces resale value. Low mileage vehicles command a premium. However, a well-maintained higher-mileage vehicle is often a better buy than a low-mileage neglected one.