Car Depreciation Calculator
What a car loses in value each year, and what that costs per month.
Depreciation is the largest cost of owning a new car and the only one that never appears on a statement. It is the difference between what you paid and what the car is worth later, and it is spent whether you sell or not.
Enter the price, how much of its value the car keeps each year and how long you plan to keep it, and this calculator shows the value at the end, the total loss and the monthly cost of that loss.
At a glance
- What you enter
- Purchase price, Value kept each year, Years you plan to keep it, Miles driven per year
- What you get
- Value at the end, Total loss in value, Depreciation per month, Depreciation per mile
- Formula shown
- Yes - every step, right below your results.
- Cost and privacy
- Free, no account needed, and nothing you type is stored.
See worked examples ↓ Read the FAQ ↓ Share this calculator ↓
Results are estimates for general information only - always verify with a professional or official source before acting on them.
How to use the Car Depreciation Calculator
- 1 Enter Purchase price
- 2 Enter Value kept each year - Many cars keep about 80% a year in the first years, which is roughly half their value after three years.
- 3 Enter Years you plan to keep it (years)
- 4 Enter Miles driven per year - Higher mileage reduces what the car is worth at the end.
- 5 Press Calculate. You get Value at the end, Total loss in value, Depreciation per month, Depreciation per mile, and every intermediate step stays visible under “How is this calculated?”
- 6 Change one number at a time to see what moves the result - that is usually the most useful thing a calculator can tell you.
Worked examples
Real numbers run through this calculator. Open any example to load it into the form above and change it.
A $28,000 car keeping 82% a year for four years
A new car driven 12,000 miles a year, with the loss spread over the miles.
You enter
- Purchase price
- $28,000.00
- Value kept each year
- 82%
- Years you plan to keep it
- 4 years
- Miles driven per year
- 12,000
You get
- Value at the end
- $12,659.41
- Total loss in value
- $15,340.59
- Depreciation per month
- $319.60
- Depreciation per mile
- 0.32 per mile
After four years the car is worth $12,659.41, a loss of $15,340.59, which is 54.8% of what you paid. That is $319.60 a month and $3,835.15 a year, or $0.32 for each of the 48,000 miles driven. The first year alone takes $5,040, and the average loss across the four years is 13.7% a year rather than the first-year 18%.
A $12,000 car keeping 78% a year for eight years
A modest car driven 6,000 miles a year and kept until it is old.
You enter
- Purchase price
- $12,000.00
- Value kept each year
- 78%
- Years you plan to keep it
- 8 years
- Miles driven per year
- 6,000
You get
- Value at the end
- $1,644.14
- Total loss in value
- $10,355.86
- Depreciation per month
- $107.87
- Depreciation per mile
- 0.22 per mile
After eight years the car is worth $1,644.14, a loss of $10,355.86, which is $107.87 a month and $1,294.48 a year. Because it is driven only 48,000 miles in total, the loss works out at $0.22 a mile, against $0.32 a mile for the more expensive car. Less of the price is left, 13.7%, but the low mileage is what keeps the cost per mile down.
Guides that go with it
What a car really costs each month
The payment is one line of five. Insurance, fuel, maintenance and depreciation decide whether a car is affordable.
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Frequently asked questions
Does the value fall by the same amount each year?
No. The retention rate is applied to what the car is worth at the start of each year, not to what you paid, so the loss shrinks as the car gets older. A $28,000 car that keeps 82% a year loses $5,040 in the first year, then 18% of $22,960 in the second, and so on. After four years it is worth $12,659.41.
This is different from the straight-line view that many people carry in their heads, where the same 18% of the purchase price comes off every year. Straight line would take $20,160 over four years; compounding takes $15,340.59. The compounding picture is closer to how used prices actually behave.
What retention rate should I use for my car?
The rate is what the car keeps each year as a share of its value at the start of that year. A rate of 82% means it loses 18% a year, which leaves about 45% of the original price after four years. Higher rates suit models in strong demand and lower ones suit cars with heavy running costs, unusual specifications or a large supply from fleet sales.
The honest way to set it is to look at what your model and year actually sell for now, then work backwards. Listings for three-year-old examples of the car you are considering are the single most useful input here, and they beat any general rule by a wide margin.
Why is mileage separate from the retention rate?
Mileage does not change the value at the end, which comes from the price and the rate. It changes the cost per mile, which divides the total loss by the miles you drive over the whole period. The same car over the same four years costs $0.32 a mile at 12,000 miles a year and $0.64 a mile at 6,000.
That figure is the fairest way to compare two cars used differently, because it puts the loss on the miles that caused it. A cheap car that loses value quickly can cost more per mile than an expensive one that holds its value, and only this line shows it.
Is depreciation money I actually spend?
Only when you sell, but it is committed either way. The car is worth less than you paid, and that difference is the price of having used it. The monthly cost line spreads the loss across the months you own the car, which is the number to compare against a lease payment or a train fare.
Depreciation is also the largest single cost of owning a new car and the only one that never appears on a bill. The Total Cost of Ownership Calculator puts it alongside finance, fuel and insurance so the whole picture is in one place.
Terms used here
Short, plain-language definitions of the words this calculator uses.