Car Depreciation Calculator

See how much value a car loses each year and what it may be worth when you sell, trade in or reach lease end.

Estimated value at the end—

Year	Value at year end	Lost that year

Total depreciation—
Value kept (residual %)—
Average loss per year—
Average loss per month—

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Estimates for education only — not financial, tax or legal advice. Lenders may calculate taxes and fees differently by state or province. Always check your contract.

How car depreciation works

Depreciation is the value a car loses over time. It is usually the biggest cost of owning a car — larger than fuel or insurance. New cars lose value fastest in the first year, then more slowly. This calculator follows that pattern: one rate for year 1 and a lower rate for every year after.

Value after year 1 = price × (1 − first-year rate) Value after year k = value after year k−1 × (1 − later-year rate) Residual % = final value ÷ price

Worked example

A $30,000 car that loses 20% in year 1 and 15% a year after that is worth about $24,000 after one year, $20,400 after two and $17,340 after three — it keeps about 57.8% of its value. After five years it is worth about $12,528.

Typical depreciation rates

Year 1: about 15–25% for most new cars; luxury and electric models can lose more.
Years 2–5: about 10–15% a year.
Pickups, popular SUVs and reliable compact cars often hold their value better than average.
High mileage, accidents and poor condition lower the value further.

Why it matters for a lease

A lease payment is mostly depreciation: the gap between the price and the residual value set by the lender. A car that holds its value has a higher residual and a lower payment. Use the 3-year result here to sanity-check the residual in a lease quote with the car lease calculator.

Frequently asked questions

How much does a car depreciate per year?

Many new cars lose about 15–25% in the first year and around 10–15% each year after. Real values depend on the model, mileage and market.

What is a good residual value after 3 years?

Around 50–60% after three years is common for mainstream cars. Cars that keep more value usually have cheaper lease payments.

Do electric cars depreciate faster?

Many electric cars have lost value faster than gas cars, partly because of price cuts on new models and changing incentives. It varies a lot by model.

How can I reduce depreciation?

Choose a model known for holding value, keep the mileage reasonable, look after the car and keep the service records. Buying nearly new avoids the steep first-year drop.

Is this an official car valuation?

No. It is an estimate from the rates you enter. For a real value, use dealer offers or valuation guides.