Car Depreciation Calculator
Original MSRP or purchase price.
Vehicle category
iSeeCars 2026 study (Mar 2025–Feb 2026) — 5-year depreciation: Average 41.8% · Truck 34.2% (best) · EV 57.2% · Holds value (Porsche 911) 7.8% · Jaguar I-Pace 72.2%.
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How to use
- 1 Enter the original purchase price (MSRP if new, actual paid if used).
- 2 Enter the annual depreciation rate. Average for most brands: 15% (year 1 about 20%). Toyota/Honda/Lexus: 10–12%. Luxury European: 18–22%. EVs: variable, often 18–25%.
- 3 Enter the number of years owned (typical analysis: 3, 5, or 10 years).
- 4 Click Calculate to see year-by-year value, total depreciation, and average annual loss.
- 5 Use this for trade-in negotiations, lease vs. buy comparison, or to plan how long to keep a car before the depreciation curve flattens (typically year 7–8).
About Car Depreciation Calculator
FAQ
Q How much does a car depreciate in the first year?
Average new car loses 15–25% in year 1. The "drives off the lot loses 10%" adage is roughly the immediate depreciation; the rest happens over the year. Toyota/Honda may lose 10–12% year 1; luxury European sedans 22–28%. After year 1, the rate slows to about 15% annually.
Q Which cars hold their value best?
Toyota Tacoma, Toyota 4Runner, Jeep Wrangler, Honda Civic, Toyota RAV4, Lexus RX, Porsche 911, Subaru Forester. KBB's annual Best Resale Value Awards consistently feature these. Trucks, body-on-frame SUVs, and Japanese reliability leaders dominate. Sedan and luxury depreciation is typically much steeper.
Q Which cars depreciate the fastest?
BMW 7-Series, Mercedes S-Class, Cadillac CT6, Maserati, full-size sedans across most brands, and most EVs. Luxury sedans can lose 65–75% in 5 years. EVs face additional headwinds: battery degradation concerns, federal tax credit expiration, and rapid technology improvement making older models obsolete.
Q Should I buy new, used, or certified pre-owned?
Used (3–5 years old) typically offers the best dollar value per mile because the steepest depreciation has already happened. Certified Pre-Owned (CPO) costs 5–10% more than non-certified but includes manufacturer warranty extension and inspection. New is best for long-term holders (8+ years) who can amortize depreciation over the full lifecycle.
Q When should I sell or trade in my car?
The "sweet spot" for value is around year 7–8 — depreciation has slowed substantially (typical 5–7%/year), warranty has likely expired, and major repairs haven't started yet. Selling earlier loses more depreciation; holding past year 10 means rising repair costs. Trade-in vs. private party: private party typically nets $1,500–$3,000 more.
Q How does mileage affect depreciation?
High mileage (over 15K/year) accelerates depreciation. Most depreciation models assume 12–15K miles/year; over that, value drops faster. KBB and Edmunds both use mileage curves — a car with 75K miles at age 5 is worth more than one with 100K miles at age 5, sometimes by $1,500–$3,000 difference.
Q Do EVs really depreciate faster than gas cars?
Most do. Battery aging concerns, rapid technology improvement, and expiring federal tax credits create extra pressure. Tesla holds value better than other EVs (40–55% over 5 years) but still worse than Toyota/Honda gas. The 2017–2019 EV cohort especially struggled. Newer EVs (2022+) may hold value better as battery tech matures.
Q Can I deduct car depreciation on taxes?
For business use only — the IRS allows depreciation under Section 179 (immediate expense) and Section 168 (bonus depreciation). Personal-use vehicles cannot deduct depreciation. Self-employed filers should consult an accountant on luxury auto limits ($20,400 first-year cap on most cars), the actual-expense method, or the simpler standard mileage rate (70¢/mi 2025).
Official resources
KBB — Best Resale Value Awards
Authoritative annual KBB rankings of US vehicles with the slowest depreciation.
Edmunds — True Cost to Own
Edmunds 5-year depreciation and total cost of ownership tool by vehicle.
IRS Publication 463 — Travel and Vehicle
IRS rules on business vehicle depreciation deduction (Section 179 and 168).
NADA Guides — Vehicle Values
NADA used car value reference, the source banks use for trade-in pricing.