Car Depreciation Calculator
Estimate how much value a car loses over time. Enter the purchase price, the car's age, and an annual depreciation rate, and this calculator shows the current value by both the declining-balance and straight-line methods, plus the total and average yearly loss.
Formula
Declining Balance: Value = Price × (1 − Rate%)^Years
Straight-Line: Value = Price × (1 − Years × Rate%)
- Declining balance applies the depreciation rate to the remaining value each year: Value = Price × (1 − rate)^years. This mirrors how cars lose value fastest early on.
- Straight-line spreads the loss evenly: Value = Price × (1 − years × rate), floored at zero.
- Total depreciation here is the price minus the declining-balance value.
- Average annual loss divides total depreciation by the car's age.
- New cars often depreciate 15–20% per year early on; rates vary by make, mileage, and condition.
- Enter the price in your local currency — the method is the same regardless of currency.
$30,000 car, 5 years, 15%/yr
Inputs
- Purchase Price: 30000
- Age of Car: 5 years
- Annual Depreciation Rate: 15 %
Declining balance: $30,000 × (1 − 0.15)^5 ≈ $13,306. Total loss ≈ $16,694, averaging about $3,339 per year. Straight-line gives $30,000 × (1 − 0.75) = $7,500.
Frequently asked questions
What's the difference between the two methods?
Declining balance removes a percentage of the remaining value each year, so losses are front-loaded (realistic for cars). Straight-line removes an equal amount each year until it reaches zero.
How fast do cars depreciate?
Many lose 15–20% of their value per year, with the steepest drop in the first year. Luxury and high-mileage vehicles often depreciate faster.
Which value should I trust for resale?
The declining-balance figure usually tracks real-world resale more closely, but actual prices depend on demand, condition, mileage, and service history.
Why does straight-line hit zero?
Straight-line removes the same fixed amount yearly, so at a high rate it can reach zero within the term. Declining balance only approaches zero and never quite gets there.