Car depreciation formulas
The percentage is applied to the remaining value each year, not to the original price every year.
This gives one comparable annual rate even when the cash loss was not equal in every year.
How to use the calculator for a used car
Start with a current value supported by comparable vehicles of the same model, age, mileage, powertrain, specification and condition. Project from that value if you want a future scenario. If you already own the car, switch to the past-rate calculation and compare the original purchase price with a current verified value.
Do not reuse the original new-car list price when you bought the car used. The calculator should begin from the amount relevant to your decision: the price paid for historical depreciation or today's realistic value for a future residual-value scenario.
Car value by year at different depreciation rates
The examples below start from 30,000 and apply the same rate to the remaining value each year. They are mathematical scenarios, not market forecasts.
| Annual rate | After 1 year | After 3 years | After 5 years |
|---|---|---|---|
| 8% | 27,600 | 23,361 | 19,772 |
| 12% | 26,400 | 20,445 | 15,832 |
| 18% | 24,600 | 16,541 | 11,122 |
Choose a rate from evidence, not a generic promise
Depreciation is not fixed across every car. Age, mileage, body style, powertrain, reliability, specification, condition, accident history and local demand can all change the curve. Start from valuations or comparable listings for the exact model, then test a cautious range.
Add depreciation to the complete ownership cost
Depreciation is an economic cost even though it does not leave the bank account each month. Compare it with finance interest, insurance, fuel or charging, servicing, tyres and repairs. Use the total car cost calculator for monthly cash flow, then add the depreciation scenario when comparing two ownership choices.
If a loan balance is close to or above the projected vehicle value, check the negative-equity calculator before changing cars.
Sources and checks
AutoPrisme uses the figures you enter. The links below explain the rule, market context or consumer protections used to frame this calculator. Always verify the numbers in your own quote or contract.
- AAA — Your Driving Costs 2026AAA defines depreciation as the difference between purchase price and resale value and includes it in complete ownership cost.
- Consumer Financial Protection Bureau — Auto-loan key termsOfficial guidance explaining vehicle value, loan-to-value and the risk of owing more than the car is worth.
- Consumer Financial Protection Bureau — Trading in a financed carOfficial guidance on comparing the loan payoff amount with a researched trade-in or cash value.
Frequently asked questions
How is future car value calculated?
The projection applies your chosen annual depreciation percentage to the remaining value each year. It is a declining-balance scenario, not a live vehicle appraisal.
How do I calculate my car's annual depreciation rate?
Enter the price paid, today's comparable market value and the time owned. The calculator finds the constant annual percentage that links the two values over that period.
Is a depreciation calculator the same as a car valuation?
No. A valuation estimates what a specific vehicle may be worth now using its model, age, mileage, condition, history and local demand. This calculator models the values you enter and does not claim to provide a live market price.
Can a car have negative depreciation?
Yes mathematically: if today's verified value is above the price paid, the calculated depreciation rate is negative and represents annualised appreciation. That can happen with unusual market conditions or collectible cars.
How much does a car depreciate per year?
There is no single reliable percentage for every car. Age, mileage, model, condition, history, specification and local demand all matter. Use comparable market values for the exact vehicle, then test several annual rates rather than treating one generic average as a promise.
Can I use this as a used car depreciation calculator?
Yes. Enter the used car's verified value today as the starting value to project a future scenario. To measure its past rate, enter the price you paid, a current comparable value and the time owned.
What is a car's residual value?
Residual value is an estimate of what the vehicle may be worth at the end of a chosen period. This calculator models it from your starting value and annual rate; it is not a live appraisal or a guaranteed sale price.