Cars lose value every year, and the biggest drop usually comes first. This car depreciation calculator estimates what a car will be worth after each year you own it, how much value it loses in total, and the average loss per year. Pick an estimate or enter your own rates.
- Total value lost $0
- Share of value kept 0%
- Average loss per year $0
Rough estimate only. Real values depend on make, model, mileage, condition and market demand; check pricing guides for your car.
How Much Do Cars Depreciate per Year?
Estimates vary by source and by year. A commonly cited rule of thumb is that a new car loses around 20% of its value in the first year and roughly 60% within five years. CARFAX gives a gentler average: about 12.5% in the first year and about 5% per year over the next four, leaving the car worth about 66% of its purchase price after five years. Individual models can do much better or worse than either estimate.
| Estimate | Year 1 loss | Later years | Value left after 5 years |
|---|---|---|---|
| CARFAX average | About 12.5% | About 5% of price per year | About 66% |
| Common rule of thumb | About 20% | About 15% per year | About 40% |
What Makes a Car Depreciate Faster or Slower?
- Brand and model reputation: models known for reliability often hold value better.
- Mileage: high mileage lowers value.
- Condition and history: accidents, damage and missing service records hurt resale.
- Supply and demand: popular trucks and SUVs often hold value well; oversupplied models drop faster.
- New model redesigns and incentives: big discounts on new cars can push used prices down.
- Technology: fast-changing tech, such as in some EVs, can speed depreciation.
How to Reduce Depreciation
- Buy a lightly used car that has already taken the first-year hit.
- Choose models with strong resale value.
- Keep mileage reasonable and maintain the car with records.
- Avoid unusual colors and heavy modifications.
- Keep the car longer; yearly depreciation slows over time.
Related guides: learn how to get the most for your trade-in, sell your car privately, see the most reliable car brands, and calculate your total cost of ownership.
Car Depreciation FAQ
How Much Does a Car Depreciate in the First Year?
Estimates vary: CARFAX puts the average around 12.5%, while a common rule of thumb is about 20%. Some models lose much more or less.
How Much Is a Car Worth After 5 Years?
CARFAX estimates an average car keeps about 66% of its purchase price after five years, while other rules of thumb suggest closer to 40%. It depends heavily on the model and condition.
How Do I Calculate Car Depreciation?
Subtract the expected yearly loss from the value each year, or use the calculator with an estimated first-year loss and a yearly rate after that.
Which Cars Hold Their Value Best?
Models with strong reliability reputations and high demand, often trucks and certain SUVs, tend to hold value better.
Does Mileage Affect Depreciation?
Yes. Higher mileage usually lowers a car’s value.
Is It Better to Buy a Used Car to Avoid Depreciation?
Buying a lightly used car lets the first owner absorb the steepest early drop in value.