Car Depreciation Calculator
Estimate your vehicle's current value, total depreciation, and what it will be worth in 5–10 years.
Why New Cars Lose 20% in the First Year
The moment you drive off the lot, the car transitions from "new" to "used" and can no longer command the new-car premium. Additionally, the first year captures the steepest part of the depreciation curve — dealers and private sellers compete on price for used inventory. Luxury vehicles depreciate fastest because the initial markup is largest and the pool of used buyers willing to pay premium prices is smaller.
Which Vehicles Hold Value Best
Trucks (especially full-size American pickups) and Toyota/Honda vehicles consistently lead in residual value retention. The Toyota Tacoma historically retains 60–70% of its value after 5 years. Ford F-Series and Chevy Silverado trucks also hold well due to sustained commercial demand. Luxury German brands (BMW, Mercedes, Audi) depreciate significantly — often losing 50%+ in 3 years — making them excellent buys used but poor new-car investments.
Depreciation vs. Total Cost of Ownership
Depreciation is typically the single largest cost of car ownership — often exceeding fuel, insurance, and maintenance combined. A $50,000 vehicle losing $8,000/year in value costs more per year in depreciation alone than many economy cars cost in total. When comparing vehicles, always calculate the total cost of ownership: depreciation + fuel + insurance + maintenance + financing costs.
Leasing vs. Buying from a Depreciation Perspective
A lease essentially means you pay for the depreciation during the lease term plus interest (money factor). If a car depreciates 45% in 3 years, you pay for that 45% plus fees. Buying avoids paying the depreciation markup built into lease money factors, but exposes you to residual value risk. Buying used at the 5–7 year depreciation floor is often the lowest total-cost option.