Car Depreciation Calculator
Project the true annual depreciation curve, future trade-in value, and monthly ownership cost of any new or pre-owned vehicle.
| Year | Starting Value | Annual Drop (%) | Loss in Value | Ending Resale |
|---|---|---|---|---|
| Enter vehicle price to generate yearly schedule. | ||||
How to Use This Calculator
- Enter Purchase Price: Input what you paid (or plan to pay) including dealer fees, before taxes.
- Specify Vehicle Age: Select whether the car is brand new or bought 1 to 5 years used to correctly adjust the initial steep depreciation penalty.
- Choose Ownership Duration: Select how many years you plan to keep the vehicle before trading in or selling private-party.
- Inspect the Year-by-Year Schedule: Review exactly how much equity vanishes each year so you never end up upside-down on an auto loan.
The Formula
Vehicles experience exponential declining-balance depreciation rather than simple straight-line loss:
Automotive industry benchmarks apply a sliding non-linear decay scale:
- Year 1: ~20% drop (10% lot drop + 10% first year wear).
- Year 2: ~15% drop.
- Year 3: ~12% drop.
- Year 4 & 5: ~10% annual drop.
Mileage multipliers adjust the baseline curve: Low annual mileage scales depreciation down by 10% (0.90x), while heavy driving accelerates depreciation upward by 15% (1.15x).
Worked Example
Scenario Profile
A buyer purchases a brand new sedan for $35,000.00 planning to drive average mileage for 5 years:
1. Year 1: $35,000 × (1 − 0.20) = $28,000.00 (-$7,000 loss)
2. Year 2: $28,000 × (1 − 0.15) = $23,800.00 (-$4,200 loss)
3. Year 3: $23,800 × (1 − 0.12) = $20,944.00 (-$2,856 loss)
4. Year 4: $20,944 × (1 − 0.10) = $18,849.60 (-$2,094 loss)
5. Year 5: $18,849.60 × (1 − 0.10) = $16,964.64 Final Value
Total 5-Year Loss: $18,035.36 (48.5% value retained, costing ~$300.59/mo in pure depreciation).