Car Depreciation Calculator
Enter the price you paid, how fast you expect the car to lose value and how many years you will keep it. The calculator shows its estimated value, the total lost and the monthly cost.
How to use this car depreciation calculator
- Enter the price you paid or expect to pay for the vehicle.
- Enter how many years you plan to own it. Part years such as 2.5 are fine.
- Enter the first-year depreciation rate. New cars often lose more in the first year than later.
- Enter the rate for each later year. These two rates are your assumptions, so try a few values.
- Press Calculate to see the estimated value and the average cost of ownership from depreciation.
How to calculate car depreciation
The calculator applies a percentage drop each year, with a different rate in the first year.
- Value after year 1 = price x (1 – first-year rate)
- Value after each later year = previous value x (1 – later rate)
- Part years use the same rate raised to the fraction of the year
- Total depreciation = price – value
- Per year = total depreciation / years, and per month = per year / 12
Worked example
You buy a car for $30,000. You assume 20% depreciation in the first year and 15% in each later year. After year 1 it is worth 30,000 x 0.80 = $24,000. After year 2 it is worth 24,000 x 0.85 = $20,400. After five years it is worth 24,000 x 0.85 x 0.85 x 0.85 x 0.85 = $12,528.15. That is a loss of $17,471.85, or 58.2% of the price, about $3,494.37 per year and $291.20 per month.
Assumptions & limits
- The default rates of 20 percent and 15 percent are placeholders and not market data. Replace them with figures for the model you are looking at.
- Depreciation is modeled as a fixed percentage each year. Real prices also fall with mileage and move with the used car market.
- The estimate ignores condition, accidents, options, color and local demand.
- Trade-in and private-sale values differ, so a dealer offer may be lower than the estimated value.
- Depreciation is one part of ownership cost. Fuel, insurance, repairs and interest are separate.
Frequently asked questions
How do I calculate car depreciation?
Multiply the price by one minus the depreciation rate for each year. A 20 percent first-year drop on $30,000 leaves $24,000.
How much does a new car depreciate in the first year?
It varies by model and market. The calculator starts at 20 percent as an editable assumption, so use your own research for a specific vehicle.
Do cars depreciate faster at the start?
Many do, so the calculator has a separate first-year rate. Later years often lose a smaller percentage.
Does mileage change the value?
Yes. Higher mileage lowers value. You can raise the rates to reflect heavy use.
Is depreciation a real cost?
Yes. It is the difference between what you pay and what you can sell the car for, and it is often the biggest cost of owning a car.
Can I use it for a used car?
Yes. Enter the price you pay and use a lower first-year rate if the car has already lost value.
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Last updated: November 2026