How to use it
- Choose What do you know?: a yearly rate, or the current price of the car.
- Enter the Purchase price and the Years the car has been owned or will be kept.
- For a rate, enter the Yearly depreciation rate, %. For a price, enter the Current price and the rate is found for you.
- Read Value after the years and Yearly rate used, then the Value year by year table and the chart.
How the value falls
The declining balance method takes the same share of the value away each year, so the fall is largest in the first year and smaller after that. Each year's value is the value of the year before times one minus the rate. Wikipedia's depreciation article shows the method with a cost of 1,000 at 40 per cent a year: the value is 600, 360, 216 and then 129.60 after four years.
Value after n years = price × (1 − rate)^n
Yearly rate = 1 − (current price ÷ price)^(1 ÷ years)
Fall in the year = value last year − value this yearWhy this is a model, not a valuation
- A real resale price depends on the market: the mileage, the condition and service history, the season, and the demand for the model.
- Prices of new cars change, and so do the values of used ones, so a figure for one year may not hold the next.
- A rate found from two prices is the average fall over the years, not a rule for the year after.
What this calculator does not include
- Depreciation for tax in a business: that follows its own rules and periods, not the market value.
- Insurance, service and fuel costs, which are separate from the value.
- The costs of selling, such as fees and the time to find a buyer.
Worked example: 25,000 at 15 % a year for 5 years
Value after 5 years: 25,000 × 0.85^5 = 11,092.63. The fall over the five years is 25,000 − 11,092.63 = 13,907.37, which is 55.6 per cent of the price.
In the first year the car loses 25,000 × 0.15 = 3,750. In the second it loses 21,250 × 0.15 = 3,187.50, because the value it starts that year with is smaller.
| Year | Value | Fall in the year |
|---|---|---|
| 0 | 25,000.00 | — |
| 1 | 21,250.00 | 3,750.00 |
| 2 | 18,062.50 | 3,187.50 |
| 5 | 11,092.63 | 1,957.52 |
Frequently asked questions
How fast does a car lose value?
It depends on the model, its age, its mileage and the market. The rate here is one you set, or one you find from two prices. It is not a measured fact about your car.
What is the declining balance method?
Each year the car loses the same share of the value it had at the start of that year. The fall in money is largest in the first year, and the value gets close to zero without reaching it.
How do I find the yearly rate from two prices?
Divide the current price by the purchase price, take the root for the number of years, and subtract from one: rate = 1 − (current ÷ purchase)^(1 ÷ years). A car that falls from 25,000 to 16,000 in three years loses 13.8 per cent a year.
Why does the value of my car differ from the calculator?
The calculator uses one rate for every year, and the market does not. The mileage, the condition, the service history, the season and the demand for the model all change the price a buyer will pay.
Is this a valuation?
No. It shows how a value can fall at one rate. For a valuation, use a price guide, several dealers' offers or a professional valuer.
Does the calculator keep the numbers I type?
No. The calculation runs in your browser, and nothing you type is sent to a server or saved for later.
Sources
Figures and text last checked on Tuesday, November 10, 2026.