Car Depreciation Calculator
No depreciation rate is researched for you here, and none ever will be. What a car loses depends on the make, the model, the fuel, the market and the year, and a rate presented as an answer would be wrong for almost every reader while still looking like one. The figure in the box is a placeholder that makes the arithmetic visible — bring your own, and the last section below says where to find it.
Of what it is worth at the start of that year, not of the original price.
Leave blank to use the same rate throughout.
Worth after 5 years
$11,122
$3,776 a year of ownership, or $315 a month, before a drop of fuel is bought.
- Year 1$30,000 → $24,600 · $5,400 gone
- Year 2$24,600 → $20,172 · $4,428 gone
- Year 3$20,172 → $16,541 · $3,631 gone
- Year 4$16,541 → $13,564 · $2,977 gone
- Year 5$13,564 → $11,122 · $2,441 gone
How this was worked out
- The shape usedDeclining balance: each year takes 18% of what the car is worth at the START of that year, not of the $30,000 it cost. Straight-line would take the same cash off every year, which is how a van is written down and not how a forecourt prices one.
- The first year$30,000 × (1 − 18%) = $24,600
- At the end of the term$30,000 × 0.82^5 = $11,122
- Averaged over the years kept($30,000 − $11,122) ÷ 5 = $3,776 a year
The rate above is still the example one this page loads with. It is not a forecast, not an average and not a figure for your car — it is there so the arithmetic has something to chew on. Replace it before you believe any number on this page.
$3,776 a year is the part of running this car that never appears on a statement. It is charged daily and collected once, on the day it is sold, which is why so many people meet it for the first time as a shock at a trade-in desk rather than as a line in a budget.
The rate is applied to what the car is worth at the start of each year rather than to the original price, which is why the first year takes more money than the fifth at an unchanged percentage. That shape matters: it is the reason a two-year-old car is so often better value than a new one, and the reason the cheapest year of ownership is usually somebody else’s.
To find a rate for your own car, price the exact model you are looking at, then price the same trim three or four years older with ordinary mileage on the same listings site. Dividing the older price by the newer one and taking the appropriate root gives a yearly rate drawn from your market rather than from an average of everybody’s.
One rate, compounding smoothly, for the whole period. Real second-hand values move in steps rather than in a curve — a model change, a new emissions rule, a fuel price, the month of the year — and none of that is in here. Nothing above counts the money that comes back out of a car either: options rarely survive into the used price, and a written-off or badly recorded history takes a bite this arithmetic knows nothing about.
Why no rate is filled in for you
Nearly every depreciation tool opens with a percentage already sitting in the box. This one does not, and that is a decision rather than an unfinished job. The speed at which a car sheds value belongs to one model, in one fuel, in one market, in one particular year. Two vehicles bought on the same afternoon from the same forecourt can finish twenty percentage points apart after three years, and no figure printed into a calculator can know which of them is parked outside your house.
A built-in rate would buy the appearance of precision and nothing else. The arithmetic would still be flawless and the output would still line up in tidy columns, and it would still be wrong for most people reading it. So the rate is an empty field, and the fourth section explains how to fill it from the market you are actually buying and selling in.
How the arithmetic runs
Each year removes a share of what the vehicle was worth when that year began, not a share of the original ticket price. Start at 30,000 with a rate of 20% and year one takes 6,000 away. Year two takes 4,800, because it is claiming a fifth of 24,000 rather than a fifth of 30,000. By the end of the third year the car stands at 15,360, and 14,640 has evaporated.
Spread that loss across the period and you get the figure this page leads with: 4,880 for every year of ownership, a little over 400 a month, before a drop of fuel is bought or a single service is booked. Every amount is in whatever units you typed the price in, and the currency box exists only to label the output so a figure in one denomination never gets read as another.
Why the first year gets a field of its own
The one thing almost everyone agrees on is that the opening year behaves differently from the ones after it. Registration turns a new item into a used one, warranties start counting down, and the first owner absorbs whatever premium was paid for being first. Applying a single smooth percentage across the whole period understates that opening drop and then overstates every year afterwards to compensate.
So there is a separate box for it, left blank by default. Fill it in and the opening twelve months use that figure while everything later uses the ordinary one. Leave it empty and one rate covers the lot. Both numbers are still yours; this page has simply made room for the shape you found rather than imposing one.
Building a rate from live listings
The method takes about ten minutes and beats any published average. Find the asking price for the exact specification you are considering. Then find the same trim, same fuel, same transmission, three or four years older, with ordinary mileage for its age, on the same site on the same day. Divide the older price by the newer one and take the root matching the number of years between them — the fourth root across four years — and subtract the answer from one.
Two cautions worth carrying. Advertised prices are asking prices and trade-in offers sit well below them, so a rate built this way describes private sale rather than what a dealer will hand you. And the further your comparison reaches back, the more it describes a market that no longer exists: duty changes, emissions rules and one manufacturer discounting heavily can bend a model out of shape within a single year.
Finding a rate you can defend
Is a declining percentage really the right shape?
It fits the second-hand market far better than an equal amount every year does, because buyers price from the current value rather than from the original invoice. It is still an approximation. Real curves have steps in them at three years, at the end of a warranty, and at whatever mileage the local market treats as high.
What should I do if I genuinely cannot find a rate?
Run the page three times at rates a few points apart and read the spread rather than any single answer. A range from one figure to another tells you honestly how uncertain the estimate is, which is far more useful than a confident number pulled from an average of every car ever sold.
Does hard mileage make the percentage steeper?
It changes the valuation rather than the rate, and the two are worth keeping apart. Work out the ordinary decline here, then adjust the result for an odometer well above or below what a car of that age would be expected to show. The mileage tool on this site does exactly that half of the sum.
Why does the cost per year keep falling the longer I keep it?
Because each year takes its share of a smaller and smaller number. The fifth year of ownership costs far less in lost value than the first, which is the whole financial argument for holding on to a car rather than replacing it on a cycle. Repair bills eventually climb to meet the saving, but usually much later than people expect.