Estimate your car’s current value and total value lost — compound depreciation year by year, in one click.
A new car loses roughly a fifth of its value the moment you drive it off the lot — and the meter keeps running. Our free Car Depreciation Calculator applies compound depreciation year by year: enter what you paid, how long you have owned it, and the annual depreciation rate, and it returns the car’s estimated current value plus the total value lost since purchase.
The numbers are sobering by design. A $30,000 car depreciating 15% a year is worth about $13,311.16 after five years — $16,688.84 gone, more than half the purchase price. Depreciation is the single biggest cost of car ownership, bigger than fuel, insurance, or maintenance for most new cars, yet buyers obsess over sticker price and ignore the curve. This calculator puts the curve in front of you before you sign.
Use it to decide buy new vs. buy used, to time a sale (selling before a big depreciation year), to sanity-check a dealer’s trade-in offer, or to compute the true cost per year of keeping your current car versus replacing it. The widget runs the exponential math instantly — the article below teaches you to read what it means.
Depreciation is not linear — a car does not lose the same dollar amount every year. It loses a percentage of its current value, which makes the dollar losses shrink over time even as the rate stays constant: 15% of $30,000 is $4,500 in year one, but 15% of the remaining $25,500 is only $3,825 in year two. This compounding is why the value curve dives steeply at first and then flattens — the classic depreciation shape every used-car price list follows.
The formula is exponential: value = price × (1 − rate)years. With a 15% rate, the car keeps 85% of its value each year, so after five years it keeps 0.855 = 0.4437, or 44.37% — $13,311.16 of the original $30,000. The total lost is simply price minus value: $16,688.84. Note the asymmetry: the first year destroys $4,500 of value while year five destroys only $2,348 — same rate, halved damage, because the base shrank.
Key terms:
The widget computes the power, multiplies by the price, and derives the loss — three steps that mirror the formula exactly.
You buy a sedan for $30,000. The model depreciates about 15% per year. What is it worth after five years?
Year by year, the losses were $4,500, $3,825, $3,251, $2,764, and $2,349 — the shrinking-dollar pattern that defines the curve.
Two buyers, two choices: a $60,000 luxury SUV depreciating 20% a year, and a $25,000 economy hatchback depreciating 12% a year. After four years, which lost more?
This is why total-cost-of-ownership comparisons almost always favor the cheaper, slower-depreciating car — depreciation dominates everything else.
Daniel wants a car he will keep for six years. Option A: new at $30,000, 15% depreciation. Option B: the same model, three years old, at $18,000 — and he will own it for the next six years (car age 3 to 9), with depreciation now running 12% as the curve flattens.
Option A after six years: 30,000 × 0.856 = 30,000 × 0.37715 = $11,314.43; total lost = $18,685.57. Option B after six years: 18,000 × 0.886 = 18,000 × 0.4644 = $8,358.72; total lost = $9,641.28. Buying three years used saves $9,044 in depreciation — nearly half — for the same six years of driving. The catch he must price: higher maintenance on an older car, which rarely exceeds a few thousand over the period. The curve is the discount.
Second scenario: Lisa’s dealer offers $12,000 trade-in on her five-year-old $30,000 car. The calculator says it should be worth $13,311.16. She has a number now: the offer is $1,311 light. She shows the math, gets $12,800, and takes the deal — within 4% of the estimate, which is honest dealer margin. Without the calculator she would have accepted $12,000 with a smile.
New cars: the steepest curve in the lot. Industry data consistently shows 20–30% gone in year one for the average new car, then ~15% annually. The first-year cliff is part drive-off-the-lot psychology, part the market pricing in the warranty clock starting.
Luxury and EVs: the fastest depreciators. Luxury cars shed 40–50% in three years — high running costs and tech turnover punish resale. EVs add battery-anxiety and incentive distortions: a $7,500 tax credit on the new price is effectively a $7,500 haircut on the used one.
Reliable economy cars: the slow bleeders — 10–12% a year for the best-regarded models. Their reputation is capitalized into resale value, which is why a five-year-old Toyota or Honda commands a premium that looks irrational until you run the depreciation math.
Leasing: depreciation made explicit. A lease’s monthly payment is mostly the predicted depreciation plus interest — the residual value in the contract is the lessor’s depreciation estimate. Run this calculator against the lease residual: if the car will really be worth more, buy it out; if less, hand back the keys.
Classic and collectible cars: depreciation in reverse. Past ~25 years, scarcity and nostalgia can make values appreciate — negative depreciation. The formula breaks here (rates go below zero), which is precisely the point: collectibles are a different asset class wearing a car’s body.
Business and tax depreciation: companies do not use this curve — tax codes prescribe schedules (like MACRS 5-year property) that rarely match market reality. A business car “fully depreciated” on the books at year five may still be worth $13,000 on the market — books and reality diverge by design.
History worth knowing: mass depreciation is a child of mass production. Before the Model T, cars were bespoke machines that held value like real estate. Ford’s moving assembly line did two things at once: it made cars affordable, and it made last year’s model obsolete on purpose — the annual model change, pioneered by GM in the 1920s, industrialized depreciation itself. The used-car price guide — the Kelley Blue Book, first published in 1926 — was invented to measure the very phenomenon the industry had created. Every depreciation curve since is a footnote to planned obsolescence meeting compound interest.
Edge cases and pro tips: at 0% the car never depreciates — the formula returns the purchase price, a decent model for a garage-kept collectible. Fractional years work: 2.5 years at 15% keeps 0.852.5 = 66.5% of value. For a quick mental estimate, the Rule of 72 for depreciation: years to halve ≈ 72 ÷ rate — at 15%, value halves every ~4.8 years (check: 0.854.8 ≈ 0.46, close). And always compare depreciation per year of ownership when deciding to sell: a car losing $2,300 in year six is cheaper to keep than any replacement’s year-one $4,500 loss.
When this calculator is the wrong tool: if you need a transaction price, get real market quotes — the formula cannot see accidents, trim levels, regional demand, or a recall announced last Tuesday. For financing decisions, pair depreciation with a loan calculator: owing $20,000 on a car worth $13,311 is being underwater, and only the loan math reveals it. And for the new-vs-used decision at the whole-life level, build a total cost of ownership sheet — depreciation is the biggest line, but fuel, insurance, and maintenance decide close calls.
Car depreciation (compound): current value = purchase price * (1 – annual rate/100)^years; total lost = purchase price – current value. Example: $30,000 at 15% for 5 years = $30,000 * 0.85^5 = $13,311.16; lost = $16,688.84 (55.6%). Depreciation is exponential: dollar losses shrink as value shrinks. Source: Sigma Calculator, Car Depreciation Calculator, https://sigmacalculator.net/automotive-calculators/car-depreciation-calculator/
Cite this page as: Car Depreciation Calculator, Sigma Calculator, https://sigmacalculator.net/automotive-calculators/car-depreciation-calculator/
Last updated: October 12, 2026