Average Car Depreciation Rates
| Year | Avg Remaining Value |
|---|---|
| After year 1 | ~75% of original |
| After year 2 | ~65% |
| After year 3 | ~57% |
| After year 5 | ~40% |
| After year 10 | ~15–20% |
Car Depreciation Calculator
Calculate how your vehicle depreciates over time. See the estimated value after any number of years and the true cost of ownership through depreciation — the biggest expense most car owners overlook.
Vehicle Depreciation
Frequently Asked Questions
How much does a new car depreciate?
A new car loses approximately 20% of its value in the first year (including the instant "drive off the lot" depreciation), then about 10–15% per year afterward. After 5 years, most cars are worth 40–60% of their original value. Luxury cars and high-mileage vehicles typically depreciate faster.
What cars depreciate the least?
Trucks (especially Toyota Tacoma, Ford F-150) and SUVs generally hold value best. Toyota and Honda vehicles historically depreciate slower than average. Luxury brands (BMW, Mercedes, Audi) often depreciate faster due to high initial prices and expensive maintenance costs lowering resale demand.
The shape of the curve
Cars lose value fastest at the start. A new car commonly sheds a substantial share of its value in year one — the drop beginning the moment it is registered — then declines more gently as it ages.
The practical consequence is that depreciation, not fuel or servicing, is usually the largest cost of owning a new car. It is also the one that is invisible until you sell.
Why buying used changes the maths
A two or three year old car has already taken the steepest part of the curve, paid for by the first owner. Buying at that point means the remaining depreciation per year is substantially smaller, while the car may still have warranty cover and modern safety equipment.
This is the single biggest lever on the cost of motoring for most households.
What drives the rate
- Brand and model reputation. Reliability rankings feed directly into residual values.
- Mileage. Well above average annual mileage accelerates the decline sharply.
- Condition and history. A complete service record and clean bodywork protect value; a recorded accident damages it permanently.
- Fuel type and drivetrain. Shifting demand and policy can move whole categories faster than the average.
- Specification and colour. Mainstream colours and desirable options hold value better than unusual choices.
Using the figure
Compare total cost of ownership rather than purchase price. A cheaper car that depreciates faster can cost more over four years than a dearer one that holds its value.
Estimates are necessarily approximate — residual values respond to fuel prices, interest rates, supply shortages and policy changes. Treat the output as a planning figure, and check current trade guides before a decision that hinges on it.