Car depreciation calculator
Residual value of a car after several years of ownership.
Fill in the fields and the result will appear here automatically.
Calculates a conditional residual value from your chosen depreciation rates: one rate for the first year and a constant annual rate thereafter. Each percentage applies to the remaining value, so the loss compounds rather than subtracting a fixed amount each year. Use it to compare ownership scenarios; it does not determine a market sale price or include fuel, repairs, tax or financing.
How it works
Formula and logic
Value = price × (1 − first-year loss) × (1 − annual rate) raised to the number of years after the first. With zero years the value equals the price. The supported inputs are whole periods of 0–30 years, a positive price and rates from 0 inclusive to 100% exclusive. Fractional years are rejected, not rounded. Zero rates give zero loss; an unrepresentable numerical result causes a range error.
Example
A car bought for 2,400,000 loses 20% in year one and 12% a year after: four years later it is worth 1,308,426.24.
Fields and units
- Purchase price — $
- Years of ownership — years
- Annual loss after the first year, % — %
- Loss in the first year, % — %
How to use
- — Enter the price the car was bought for.
- — Enter how many full years it has been owned.
- — Enter the annual loss rate applied after the first year.
- — Enter a separate first-year loss; it need not be the largest rate.
Method and limitations
- Calculation method
- Formula and logic
- Limitation
- The supported inputs are whole periods of 0–30 years, a positive price and rates from 0 inclusive to 100% exclusive. Fractional years are rejected, not rounded.
FAQ
Why is the first year a separate rate?
It is a modelling choice that lets the initial loss differ from later years. The first-year rate need not be larger: use assumptions for your scenario rather than a universal market curve.
What annual rate is realistic?
There is no single rate for every car. Compare similar vehicles in the same market and period, account for condition and mileage, then try several rates. Defaults are an example scenario.
Does mileage change the result?
Mileage is not an input to this model. It and condition can affect a real price, but the tool does not quantify that effect or guarantee whether the sale price will be above or below the result.
Why do part-years not count?
This tool applies rates in whole annual steps and accepts only an integer from 0 to 30. A period of 3.5 years needs a separate within-year model and is rejected here. This is a product limit, not a market valuation rule.