Car Depreciation Calculator
Enter a price and this projects the car's value year by year, anchored on the latest measured market data rather than the folklore. The five-year totals come from iSeeCars' 2026 study of 950,000 used sales; the interesting news inside them is that cars now hold value better than the old rules of thumb say, except for one segment, which holds it far worse.
Where the curve comes from, and which part is ours
The five-year totals are measured, not assumed: iSeeCars' 2026 study analyzed over 950,000 five-year-old cars sold between March 2025 and February 2026 and found average depreciation of 41.8 percent, with trucks at 34.2, hybrids at 35.4 and electric vehicles at 57.2. What the study does not publish is the year-by-year path between new and year five, so that shape is our stated convention: the first year carries a 20-point share scaled to the segment, and the remaining years decline at a single steady rate solved so the curve lands on the measured five-year total exactly. Years six through ten extend that rate, which is an honest extrapolation and labeled as one. Your year-five value is the data's; the road between is ours, and now you know which is which.
The folklore got stale, in a good way
The advice everyone learned says a car loses 15 to 20 percent of its value every year. Run that arithmetic and a car should be down nearly 60 percent by year five, and in older studies it was. The 2026 measurement says 41.8 percent, an improvement of almost four points over 2025 alone. The year-one cliff survived at roughly 20 percent, but the middle years flattened to around 8 percent annually. Cars got more durable, lightly used ones got more respected, and the old rule quietly became too pessimistic; nobody was wrong, the market moved.
The one segment moving the other way
Electric vehicles lose 57.2 percent in five years, the worst in the study, while trucks lose 34.2, the best, a spread of 23 points on the same purchase date. Part of the EV figure is used-buyer caution about batteries, but a large part is mechanical: new EV prices kept being cut, and every cut instantly reprices every used example. Which makes the same number read two ways: hard on the first owner, generous to the second. A three-year-old EV is one of the cheapest ways into a nearly new car precisely because someone else absorbed that curve, and this calculator prices exactly what they absorbed.
Worked example
A $40,000 average vehicle over five years:
It leaves year one worth about $32,000, then sheds roughly 8 percent annually to land at $23,280 at year five, a total loss of $16,720. That is about $3,344 a year, or 27.9 cents a mile at 12,000 miles a year, which is nearly double what the same car typically spends on gas. Depreciation is the biggest bill most drivers never see arrive.
Related arithmetic
The car loan calculator handles the financing side, where the combination of fast depreciation and a long loan creates the underwater stretch. The fuel cost calculator prices the cost you can see at the pump, the commute cost calculator uses full per-mile costs where depreciation belongs, and the EV savings calculator weighs the fuel savings this page's EV curve pushes against.
Data reviewed: September 2026. Figures here come from published sources and change over time. How we verify
Copy one snippet and give your visitors a working Car Depreciation Calculator.
Frequently asked questions
How much does a car depreciate per year?
The old rule of thumb said 15 to 20 percent a year, and the market has moved: iSeeCars' 2026 study of 950,000 five-year-old cars measured average five-year depreciation at 41.8 percent, which works out to roughly 20 percent in year one and then about 8 percent a year after that. The first-year cliff survived; the years after it have flattened considerably. The folklore was honest when it was written, the data just got better.
Which cars hold their value best?
By segment in the 2026 data: trucks lose only 34.2 percent over five years and hybrids 35.4, both well better than the 41.8 percent average. Electric vehicles sit at the other end, losing 57.2 percent, which is the single largest spread in the study: a truck and an EV bought the same day part ways by more than 20 points of value in five years.
Why do EVs depreciate so much faster?
Partly honest wear-and-battery caution from used buyers, but substantially something else: new EV prices themselves kept falling, and every new-price cut reprices every used example on the lot instantly. A used EV can be an excellent buy for exactly this reason, since someone else absorbed that repricing. Fast depreciation is bad for the first owner and good for the second, and it is the same number.
Is buying a 2 to 3 year old car still the smart move?
Still smart, but the discount shrank. The year-one cliff is intact at roughly 20 percent, so a lightly used car continues to skip the steepest part of the curve. But with years two through five flattening to around 8 percent annually, the gap between a one-year-old car and a three-year-old one is smaller than the old advice implies. The calculator's table prices exactly what buying at any age skips.
Is depreciation really my biggest car cost?
For a newer car, usually, and by a margin that surprises people. A $40,000 car losing 41.8 percent over five years costs about $3,344 a year in depreciation, roughly 28 cents a mile at typical mileage, which is well above what the same car spends on gas. It leaves silently, which is why the pump feels like the cost and the resale value is where the money actually went.
How does depreciation relate to a lease payment?
A lease is depreciation with a payment plan. The lessor projects the car's residual value at the end of the term, and your payments cover the projected value drop plus a finance charge. That is why fast-depreciating cars lease expensively and slow-depreciating trucks can lease surprisingly well, and why the residual assumption is the number worth reading in any lease offer.
Does mileage change these numbers?
Yes, and this model is age-based, so read it as assuming typical mileage of around 12,000 a year. A high-mileage example sits below the curve and a garage queen above it; condition, accident history, color and trim all move individual cars. The segment averages here are the honest center of a wide distribution, not a quote for your VIN.
Is this the same as tax depreciation?
No. The IRS depreciation a business claims on a vehicle follows its own schedules and limits, and it is a tax construct rather than a market measurement. This page models what the used market will actually pay, which is the number that matters when you sell or trade.