Estimate a car's value year by year. Start from published five-year averages for your type of vehicle, or enter your own rate.
Estimates for planning, not financial, tax or legal advice. Figures use US rules unless the page says otherwise.
How it's calculated
Value after t years = price × (1 − r)t
Yearly rate from a five-year loss L: r = 1 − (1 − L)1/5
This is declining-balance depreciation: the car loses the same percentage each year, so it loses the most dollars early on.
Where the default rates come from
The presets use iSeeCars' study of more than 800,000 five-year-old used cars sold from March 2024 to February 2025, which compared their prices with the original MSRP adjusted to 2025 dollars. The industry average was a 45.6% loss over five years. We turn each five-year figure into an even yearly rate:
| Vehicle type | Lost over 5 years (iSeeCars) | Even yearly rate |
|---|
| Average vehicle | 45.6% | 11.46% |
| SUV | 48.9% | 12.57% |
| Pickup truck | 40.4% | 9.83% |
| Hybrid | 40.7% | 9.92% |
| Electric vehicle | 58.8% | 16.25% |
Worked example
A $40,000 car at the average rate loses 11.46% a year. After five years it's worth $40,000 × (1 − 0.1146)5 = $40,000 × 0.544 = $21,760, a drop of $18,240. After three years it's worth about $27,760.
Limitations
- Real cars don't lose value evenly. The first year's drop is usually the biggest, so this smooth curve may run high in year one and low later.
- Model, mileage, condition, accident history, color and local demand all move the value. Some models hold value far better than the average and others far worse.
- The study's averages describe 2024 to 2025 sales. Used car prices move with the market.
- For a real price, look up your exact car on a pricing guide or get offers. For business tax depreciation, use the depreciation calculator, which has MACRS-style schedules.
Sources
How we checked this
Before every update, this calculator is run in a real browser with these known answers, and it must match all of them:
- $40,000 car at the average 45.6% five-year loss: $21,760 after 5 years ✓
- Same car after 3 years: $27,760 ✓
- $50,000 pickup after 5 years (40.4% loss): $29,800 ✓
- $25,000 at 15% a year for 4 years: $13,050 ✓
- A 100% yearly rate is rejected ✓
Last checked October 26, 2026. Spotted something wrong? The math is done in your browser with the formula shown on this page, so you can check any result by hand.
Questions people ask
How much does a car depreciate per year?
In iSeeCars' 2024 to 2025 study, the average car lost 45.6% of its value over five years. Spread evenly, that's about 11.5% a year, though the first year is usually steeper.
Which vehicles depreciate the fastest?
In that study, electric vehicles lost the most, 58.8% over five years on average, while pickup trucks (40.4%) and hybrids (40.7%) held value best.
How do I calculate my car's depreciation?
Multiply the price by (1 − yearly rate) once for each year. At 15% a year, a $25,000 car is worth $25,000 × 0.85⁴ = $13,050 after four years.
Does depreciation matter if I keep the car?
Less, because you don't sell. It matters when you trade in, sell, lease (the payment is mostly depreciation), or if the car is totaled and insurance pays its current value.
How can I reduce depreciation?
Buy a model with a strong resale record, keep the miles reasonable, keep service records, and avoid damage. Buying a few years old lets the first owner take the steepest drop.