Estimate how much your vehicle's value will decline over time, based on a typical first-year depreciation rate followed by a steady annual rate.
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New vehicles are commonly cited as losing a larger share of their value in the first year, often around 20%, than in subsequent years, where depreciation typically slows to somewhere around 10-15% annually. This calculator applies your first-year rate once, then compounds your annual rate for every year after, giving a more realistic curve than assuming a single flat rate for the vehicle's entire life.
Actual depreciation varies significantly by make, model, mileage, condition and market demand. Some vehicles, especially certain trucks and popular used models, hold value notably better than the general averages used here. Treat this calculator's output as a planning estimate, not a guaranteed resale value.
A $35,000 new car with 20% first-year depreciation and 15% annually after that, projected 5 years out: value after year 1 = $35,000 × (1 − 0.20) = $28,000. Each subsequent year multiplies by (1 − 0.15): by year 5 the value works out to $14,616.18, a total depreciation of $20,383.83, or about 58.24% of the original purchase price, over half its value lost in 5 years under these assumptions.
Applying the first-year rate to a used car's remaining value, a used vehicle you're buying today has typically already absorbed its steepest first-year drop, using the same first-year rate assumption for it as for a brand-new car overstates future depreciation, using one flat rate for both fields is often more realistic here.
Assuming depreciation is linear (an equal dollar amount lost each year), this model compounds a percentage each year, so the dollar amount lost shrinks over time even though the percentage rate stays constant, a common misreading of how declining-balance depreciation actually behaves.
Treating the projected value as a guaranteed resale figure, actual depreciation varies significantly by make, model, mileage, condition and market demand, this is a planning estimate based on general averages, not an appraisal.
A new car loses its 'brand new' premium the moment it's driven off the lot and is then classified as used, plus new model year releases and manufacturer incentives on the next year's models can further pressure resale value, all contributing to a steeper first-year drop than later years.
Not directly, this model projects value by elapsed time using typical rate assumptions. Higher-than-average mileage generally accelerates depreciation beyond what a time-only model would predict.
Yes, enter the price you're paying as the purchase price to project its value forward from today, though a used car may already be past its steepest first-year drop, so a single flat annual rate for both fields may be more realistic in that case.
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