Car Depreciation Calculator

New cars lose about 10% of their value the moment they are driven off the lot, and another 10% in the first year. By year 5, most cars have lost 40–60% of their original value. Luxury brands often depreciate faster (50–60% in 5 years) while trucks and SUVs tend to hold value better (30–45% in 5 years). After year 5, depreciation slows significantly.

The declining balance method applies a fixed percentage to the car's current value each year. At 20%/year: a $30,000 car loses $6,000 in year 1 (worth $24,000), then $4,800 in year 2 (worth $19,200), and so on. The dollar amount decreases each year but the percentage rate stays the same. This mirrors real-world depreciation more closely than straight-line.

Trucks (Toyota Tacoma, Ford F-150) and SUVs (Toyota 4Runner, Land Cruiser) historically hold value best, often retaining 50–60% after 5 years. Japanese brands (Toyota, Honda) generally depreciate slower than domestic or European brands. Electric vehicles have variable depreciation — Tesla holds value well, while many other EVs depreciate quickly as battery technology improves.

From a pure depreciation standpoint, buying a 2–3 year old used car lets someone else absorb the steepest depreciation curve. A $30,000 new car may be worth $20,000 after 3 years — buying it used saves $10,000 upfront. However, new cars come with full warranties, latest safety features, and manufacturer incentives that can partially offset this advantage.