UK Car Depreciation Calculator

A car starts losing value the moment it is driven away from the forecourt, and that loss, depreciation, is usually the single biggest cost of car ownership over time. This calculator estimates how much a car could be worth after any number of years, using editable rule-of-thumb depreciation rates for the first year, years 2 to 5, and beyond.

How to use the car depreciation calculator

Enter the purchase price and how many years you want to project forward. Typical illustrative depreciation rates are pre-filled for the first year, years 2 to 5, and year 6 onwards, reflecting the common pattern of a steeper initial drop followed by a slower, steadier decline. Adjust any of these rates if you have more specific data for the make and model you are researching, and the calculator will show the estimated value and total value lost for each year.

How the calculation works

The calculator applies a different depreciation rate to each stage of a car's life. In year 1, the full purchase price depreciates at the year 1 rate, reflecting the well-known steep initial drop. In years 2 to 5, the previous year's value depreciates at a second, usually lower, rate. From year 6 onwards, the remaining value depreciates at a third, typically even lower, rate, reflecting how a car's price tends to settle as it ages and the percentage drops become smaller against a lower base value.

Worked example

A car bought new for £25,000, using illustrative rates of 20% in year 1 and 15% for years 2 to 5: after year 1 it is worth £20,000, after year 2 around £17,000, after year 3 around £14,450, after year 4 around £12,283, and by the end of year 5 around £10,440. That is a total loss of roughly £14,560, or about 58% of the original price, over 5 years, a useful illustration of just how much of a new car's cost is depreciation rather than usage.

Common mistakes to avoid

A common mistake is treating a single depreciation percentage as accurate for every car. Depreciation varies enormously by make, model, specification, colour, mileage and condition, so this calculator is best used for broad financial planning, such as estimating running costs before buying, rather than valuing a specific car precisely.

Another mistake is ignoring depreciation entirely when comparing the true cost of ownership between two cars. A cheaper car with high depreciation can end up costing more overall than a pricier car that holds its value well, once you account for what you would get back when you eventually sell or part-exchange it.

Related calculators

If you are financing a car, our car loan calculator works out monthly repayments and total interest, and our road tax calculator estimates your annual VED. To compare running costs across fuel types, see our fuel efficiency comparison calculator and our electric car running cost calculator. Our guide comparing electric and petrol running costs looks at the wider cost picture beyond depreciation alone.