Estimate how much your car has depreciated, and what it is worth today, from the price you paid and its age. The tool uses typical first-year and ongoing rates, so you know roughly where you stand before selling or trading in.
Uses a general estimate: ~20% depreciation in year one, ~15% each following year.
Actual depreciation varies significantly by make, model, mileage and condition. Check a valuation service for a precise figure before selling.
How Much Does a Car Depreciate in 5 Years?
A typical car loses about 58% of its value in 5 years if it drops 20% in year one and 15% of the remaining value each year after. A $35,000 new car would be worth about $14,616 by year five. Real cars often land anywhere from 40% to 60% lost.
| End of year | Value of a $35,000 car | Total lost |
|---|---|---|
| 1 | $28,000 | 20% |
| 2 | $23,800 | 32% |
| 3 | $20,230 | 42.2% |
| 4 | $17,196 | 50.9% |
| 5 | $14,616 | 58.2% |
- Take 20% off the price for year one: $35,000 × 0.80 = $28,000.
- Take 15% off the remaining value for each later year: $28,000 × 0.85 = $23,800.
- Repeat to year five: $35,000 × 0.80 × 0.85⁴ = about $14,616.
Car Depreciation by Year Chart
How much does a car depreciate per year? Roughly 20% in the first, then about 15% of what is left.
| Year | Typical value lost |
|---|---|
| Year 1 | ~20% |
| Year 2 | ~15% of remaining value |
| Year 3 | ~15% of remaining value |
| Year 5 | Often 40-60% total lost |
Why a New Car Depreciates So Much in the First Year
Once a new car is driven off the lot, it’s no longer “new”. It becomes a used car in the eyes of the resale market, which triggers a steep initial drop regardless of actual condition or mileage.
Factors That Change Your Actual Depreciation Rate
- Make and model: some brands and models hold value far better than others.
- Mileage: higher-than-average mileage accelerates value loss.
- Condition: accident history and wear affect resale value beyond age alone.
- Market demand: popular models in short supply can depreciate slower than this general estimate.
Comparing a new purchase? See the full cost with our Auto Loan Calculator or Loan Calculator.
What Will My Car Be Worth in 3 Years? Check It Against the Market
At typical rates, about 58% of what you paid. Treat that as a first estimate and compare it with real-world evidence before you sell or trade in.
- Look up listings for the same make, model, year, trim and similar mileage in your area, and note the spread of asking prices.
- Get an online valuation or trade-in quote from more than one source; dealer trade-in offers are usually below private-sale prices.
- Adjust for condition. Accident history, missing service records and worn tyres all pull the figure down.
- Enter the price you actually paid, including options, rather than the sticker price.
If the estimate sits well above local listings, your model may simply be losing value faster than the typical rate. If it sits below, demand for that model may be strong, and you have room to ask more.
Depreciation also matters when you finance. If the loan balance is larger than the car’s estimated value, you have negative equity, which affects trade-ins and insurance payouts after a total loss; gap insurance exists for exactly that situation. For the accounting idea behind it, see the depreciation article on Wikipedia.