Car Depreciation Calculator

Depreciation happens faster earlier, and slower over time. For example, a car may lose up to 20% of its value after just one year of ownership, but by the end of five years it may have only lost an additional 40% in value, making it worth about 40% of its original purchase price.

Many factors influence depreciation, including the age of the car, its condition and market demand. A well-kept, 10-year-old car with low mileage, for example, may not depreciate much at all year over year. On the other hand, new electric vehicles depreciate rapidly as both the technology improves and drivers remain hesitant to purchase used EVs. Your best bet is to subscribe to track your car's depreciation.

The simplest way to calculate your car's depreciation is to subtract its current market value from the original purchase price. To find the most accurate estimated market value for your exact vehicle, start with a VIN lookup.

Trying to predict future depreciation is much trickier. Cars tend to not depreciate at consistent rates year over year, and not all models and types depreciate the same. Simply put, there isn't a one-size-fits-all formula for calculating depreciation. At best, you can reference prior market value assessments from years past and compare them to the current market value to get a rough sense of the depreciation rate.

The average car loses roughly 15% of its value per year, but again, individual depreciation rates can vary widely.

Luxury cars depreciate the fastest. This is due to multiple factors. One is that they usually come equipped with high-end features. While attractive to their initial buyers, used car buyers tend to not value these features. They're also more likely to be leased, flooding the market with available cars when the typical three-year lease period ends. They also tend to cost more to maintain, further shrinking their potential customer base.

At the other end of the spectrum, minivans, trucks and SUVs tend to hold their value better than other models. These cars hold their value for a simple reason: they are almost always in high demand. SUV values are somewhat sensitive to gas prices, but people buy trucks and minivans because they need their hauling and passenger capacities, respectively.

An accident can cause a car to depreciate up to 25% faster than expected. The exact amount, though, depends a lot on the severity of the accident. A car that survives a minor fender bender without so much as a paint scratch may experience little to no additional depreciation. On the other hand, a car damaged badly enough to be considered totalled would experience instant, 100% depreciation.

Unscrupulous sellers may try to hide a car's accident history in hopes of selling the car at a higher price. To try and avoid this scam, always run a branded title check on any vehicle you're thinking about buying.