Car Depreciation Calculator
Project how much vehicle value you lose each year and what your car may be worth later.
Estimated value after the projection
$0
This runs entirely in your browser. Nothing you enter is uploaded.
How to use this tool
- Enter the purchase price you paid for the car.
- Set an annual depreciation rate. Around 15 percent per year is a common rough estimate for an average vehicle.
- Choose how many years you want to project the vehicle value forward.
- Click Calculate to see the final value and a full year-by-year residual value curve.
How it works
This calculator uses a declining-balance model, where the car loses the same percentage of its remaining value every year rather than a fixed dollar amount. That shape matches how real cars behave: the biggest drop happens early and the loss slows down later.
Each row in the table multiplies the prior year's value by (1 minus the rate), so the dollar loss shrinks every year even though the percentage stays the same. This is why a project of vehicle value loss looks like a curve, not a straight line.
A real example
Say you buy a car for 35,000 dollars and apply a 15 percent annual depreciation rate over 5 years. After year one the car is worth 35,000 × 0.85 = 29,750 dollars, a 5,250 dollar drop. After year two it is 29,750 × 0.85 = 25,287 dollars, a smaller 4,463 dollar drop. Carrying that out to year five leaves roughly 15,529 dollars, meaning the car shed about 19,471 dollars, or 56 percent of its original price. The early years carry most of the loss.
Common questions
What annual depreciation rate should I use?
Many everyday cars lose roughly 15 to 20 percent of their value per year, with a steeper drop in year one. Luxury and electric models can differ, and high resale mileage degradation pushes the rate higher. Use a rate that fits your make, model, and driving habits.
Does this account for mileage or condition?
Not directly. Heavy mileage, accidents, and poor condition all speed up the loss, so bake that into a higher rate. The tool models the residual value curve from a single rate, which keeps it simple and easy to compare scenarios.
Why does the dollar loss shrink each year?
Because the percentage applies to a smaller remaining value every year. A flat 15 percent of 35,000 is far more dollars than 15 percent of 18,000, so the curve flattens out over time even though the rate is constant.
Is this the same as straight-line depreciation?
No. Straight-line subtracts an equal dollar amount each year and is common for accounting. This calculator uses declining-balance depreciation, which better reflects how the real resale value of a car falls fastest early on.
Can I use this for taxes or an insurance claim?
Treat the result as a planning estimate for educational use, not professional advice. Tax depreciation schedules and insurance valuations follow their own rules, so check with a qualified accountant or your insurer for official figures.