Car Depreciation Calculator

About this calculator

A car loses value the way most depreciating assets do under the reducing (declining) balance method: it doesn’t lose a fixed dollar amount each year, but a fixed percentage of whatever it’s currently worth, so the formula is future value = purchase price × (1 − depreciation rate)^years. This compounding effect is why a car’s value drops fastest in its first couple of years — often 20%+ in year one alone — and then declines more slowly in later years as the shrinking base means the same percentage represents a smaller dollar amount.

Car buyers, sellers and insurers all rely on this math for different reasons: buyers use it to judge whether a used car’s asking price is reasonable for its age, sellers use it to set a realistic price, and insurers use depreciation schedules to calculate actual cash value payouts on a totaled vehicle. Depreciation rates vary meaningfully by make, model and reliability reputation, which is why the same formula can produce very different curves for different cars.

This calculator takes your car’s purchase price, yearly depreciation rate and years of ownership, and returns its estimated value at the end of that period.