Depreciation is the value a car loses over time, and for many newer cars it's the largest single cost of ownership. This estimator projects a car's value year by year from rates you choose. It's a planning tool for budgets and comparisons, not a valuation of any particular car.
How it works
The estimator applies a percentage drop each year to the remaining value (declining balance):
- First-year drop applies only to a new car in its first year, when values typically fall fastest.
- Each later year applies to every year after that.
A $35,000 new car at 15% then 10% a year is estimated at $29,750 after one year, $26,775 after two and about $19,500 after five.
Choosing your rates
We don't have market price data, so the rates are yours. Good ways to pick them:
- Compare asking prices for the same model and trim at different ages in listings near you.
- Look at the residual value on a lease offer for the model: it's the leasing company's forecast after 2–4 years.
- Run two scenarios, a cautious one and an optimistic one, and plan around the cautious one.
Values usually fall faster for models with frequent incentives, high supply or high mileage, and slower for models with strong demand. Market swings can change everything in a year.
Using the result
- Feed the estimated end value into the cost of ownership or lease vs buy calculators.
- Compare with your loan balance from the car loan calculator to see when you'd have positive equity.
- Selling soon? Our guide on how to price your car covers setting a realistic asking price.
Frequently asked questions
How much does a car depreciate per year?
It varies by model and market. New cars commonly lose the most in the first year or two, then decline more gradually. Use local listings to calibrate the rates.
Does mileage affect depreciation?
Yes. Higher-than-typical mileage for the age usually means a lower value. Check a car's mileage against its age with the mileage checker.
Is this the same as my car's trade-in value?
No. It's a projection from your assumptions. Trade-in offers come from dealers and depend on the specific car and the market that week.
Results are estimates from the numbers you enter and, where noted, EPA ratings. Not financial advice. Page updated .