acalculator

How much will my car depreciation be?

Enter what you paid and how fast the car loses value. The car depreciation calculator shows its value at the end of each year and the total lost.

Your numbers

Value at the end
$14,616.18

A $35,000.00 car losing 20% in year 1 and 15% a year after that is worth $14,616.18 after 5 years.

Total depreciation
$20,383.83
Share of the price lost
58.24%
Average depreciation a year
$4,076.77
Average yearly rate
16.02%
Years
5

Value at the end: $14,616.18. A $35,000.00 car losing 20% in year 1 and 15% a year after that is worth $14,616.18 after 5 years.

How does the car’s value fall?

What is the car worth each year?

The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use

How to calculate

Computes a car’s value after each year and the total depreciation, when it loses one percent of its value in the first year and another percent of the remaining value each later year.

Example with the default inputs (Price paid $35,000.00, Value lost in year 1 20%, Value lost each later year 15%, Years of ownership 5): A $35,000.00 car losing 20% in year 1 and 15% a year after that is worth $14,616.18 after 5 years.

Method: value after year 1 = price × (1 − first-year % ÷ 100); each later year, value = value × (1 − later % ÷ 100); depreciation = price − value.

  • You type the yearly percents; the page uses no market data. Look at prices of the same model at different ages to estimate them.
  • The car loses the same percent of its remaining value every year after the first (declining balance), so the value never reaches 0 unless a rate is 100%.
  • Mileage, condition, accidents and market swings are not included except through the percents you type.
  • Percents are read to 10 decimal places; values are exact from there until the display, which rounds half up to the cent.

Machine-readable copies: Markdown, JSON.

Worked examples

Each example is checked against the calculator on every build.

  1. Price paid $35,000.00, Value lost in year 1 20%, Value lost each later year 15%, Years of ownership 5 gives Value at the end $14,616.18, Total depreciation $20,383.83, Share of the price lost 58.2395%, Average depreciation a year $4,076.77, Average yearly rate 16.024396%.Source: IRS Publication 946, How To Depreciate Property, Which Depreciation Method Applies (declining balance methods), https://www.irs.gov/publications/p946, retrieved 2026-10-01
  2. Price paid $20,000.00, Value lost in year 1 10%, Value lost each later year 10%, Years of ownership 3 gives Value at the end $14,580.00, Total depreciation $5,420.00, Share of the price lost 27.1%, Average yearly rate 10%.Source: IRS Publication 946, How To Depreciate Property, Which Depreciation Method Applies (declining balance methods), https://www.irs.gov/publications/p946
  3. Price paid $12,500.00, Value lost in year 1 0%, Value lost each later year 0%, Years of ownership 2 gives Value at the end $12,500.00, Total depreciation $0.00, Average yearly rate 0%.Source: IRS Publication 946, How To Depreciate Property, Which Depreciation Method Applies (declining balance methods), https://www.irs.gov/publications/p946

How it works

With P the price, a the percent lost in year 1 and b the percent lost in each later year:

  • value after year 1 = P × (1 − a ÷ 100)
  • value after year n (n ≥ 2) = value after year n − 1 × (1 − b ÷ 100)
  • depreciation in a year = value at the start of the year − value at the end
  • Total depreciation = P − value at the end
  • Share of the price lost = total depreciation ÷ P × 100, to 2 decimal places
  • Average depreciation a year = total depreciation ÷ years
  • Average yearly rate = (1 − (value at the end ÷ P)^(1 ÷ years)) × 100, to 2 decimal places

Rules

  • The price is more than $0, each percent from 0 to 100, and the years a whole number from 1 to 30.
  • Each percent is read to 10 decimal places, rounded half up. From there every value is an exact decimal until the display, so money rounds half up to the cent from the exact value.
  • The percents are yours to type. Mileage, condition, accidents, and market swings change real prices; the page includes them only through your percents.

Worked examples by hand

$35,000, 20% in year 1, 15% a year after, 5 years. Year 1: 35,000 × 0.80 = 28,000. Year 2: 28,000 × 0.85 = 23,800. Year 3: 20,230. Year 4: 17,195.50. Year 5: 14,616.175, shown as $14,616.18. Total depreciation = 35,000 − 14,616.175 = $20,383.825, shown as $20,383.83; that is 58.24% of the price and $4,076.77 a year on average. The average yearly rate is 1 − (14,616.175 ÷ 35,000)^(1/5) = 16.02%.

$20,000 at 10% every year for 3 years. 20,000 × 0.9³ = 20,000 × 0.729 = $14,580. Total depreciation $5,420 (27.10%); the average yearly rate is 10.00%.

$12,500 at 0% for 2 years. The value stays $12,500, with no depreciation.

Other questions people ask

How is car depreciation calculated?

Take the price and remove the first-year percent, then remove the later-year percent from what is left, once for each later year. A $35,000 car losing 20% in year 1 and 15% a year after that is worth 35,000 × 0.80 × 0.85⁴ = $14,616.18 after 5 years.

Why does the car never reach $0?

Each year it loses a percent of its remaining value, not of the price, so the yearly loss shrinks as the value falls. This is the declining balance pattern. Only a rate of 100% takes the value to 0.

What percents should I use?

Your own estimate. The page uses no market data. Compare asking prices for the same model, trim and mileage at different ages: if a 3-year-old car sells for 60% of the new price, the average yearly rate is 1 − 0.6^(1/3), about 15.7%.

Why use a separate first-year rate?

Many cars lose more value in their first year than in later years, so one rate for every year can understate the early drop. Set both boxes to the same percent for a single rate.

What is the average yearly rate?

The one percent that, applied every year, gives the same value at the end: 1 − (value at the end ÷ price)^(1 ÷ years). For the example above it is about 16.02% a year.

Is this the depreciation I can deduct on my taxes?

No. Tax depreciation of a business vehicle follows IRS rules (MACRS and its limits on passenger cars, in IRS Publication 946). This calculator estimates the market value of a car.