Vehicle Depreciation Calculator
Estimate what your car will be worth after a few years and how much value it loses, using declining-balance depreciation. Enter the purchase price, an annual depreciation rate and how long you plan to keep it.
Enter Values
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How to use this calculator
- Enter the purchase price you paid (or expect to pay) for the vehicle.
- Set an annual depreciation rate — the default 15% suits a typical car; use 18–20%+ for fast-depreciating models.
- Enter how many years you will hold the car, then read the estimated value, the total depreciation and the percentage lost.
How it works
This uses declining-balance (reducing) depreciation, where the same percentage is written off the remaining value each year rather than off the original price. Value after n years = purchase price × (1 − rate/100)^n. Total depreciation is simply the purchase price minus that estimated value, and the percentage lost is that depreciation divided by the purchase price.
Worked example
Worked example. A $50,000 car depreciating at 15% a year for 3 years is worth 50,000 × 0.85³ = 50,000 × 0.614125 = $30,706.25. That is $19,293.75 of depreciation, or 38.59% of the purchase price.
Common mistakes
- Expecting even yearly losses — real depreciation is front-loaded, with the biggest drop in year one, so a smooth rate understates the early hit and overstates later values.
- Applying the rate to the original price each year (straight-line) instead of the reducing balance — declining balance applies it to the shrinking current value.
- Treating the result as a valuation — actual resale value depends heavily on make, model, mileage, condition and demand.
Frequently asked questions
What depreciation rate should I use?
Most cars lose about 15–20% of their value per year, with luxury and fast-moving models often higher and some sought-after utes and 4WDs lower. Start with 15% and adjust based on how the specific model holds value.
Why doesn't this show a big first-year drop?
It applies one steady rate, so it spreads the loss evenly. Real cars lose the most in year one; to approximate that, either use a higher rate or model the first year separately.
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Tip: Enter any known values to calculate the remaining results.
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