Which depreciation method is more realistic for cars?

The declining-balance method is generally more realistic. Cars typically lose 15–25% of their value in the first year and continue to lose value faster early on. Straight-line depreciation is simpler and more common for accounting purposes.

What is residual (salvage) value?

Residual value is the estimated worth of the car at the end of its useful life — essentially its scrap or trade-in floor. For most passenger cars this is 10–20% of the original price.

What depreciation rate should I use for declining-balance?

A rate of 15–25% per year is typical for consumer vehicles. Luxury cars and sports cars often depreciate faster (20–30%), while trucks and SUVs may hold value better (12–18%).

Does this calculate actual market value?

No — this uses accounting depreciation formulas. Actual resale value depends on mileage, condition, brand, and market demand. Use tools like Kelley Blue Book or CarGurus for market-based estimates.

What is the double-declining-balance method?

Double-declining-balance uses twice the straight-line rate. For example, if the straight-line rate is 10% (10-year life), the declining-balance rate would be 20%. This accelerates depreciation even more in the early years.

Car Depreciation Calculator

Enter your car's purchase price, age, and depreciation method to see its current value and a full year-by-year depreciation schedule.

Vehicle Details

Purchase Price ($)

Residual / Salvage Value ($)

Estimated value at end of useful life (typically 10% of purchase price)

Useful Life (years)

Current Age of Vehicle (years)

Depreciation Method

Straight-Line

Equal loss every year. Simple and common for accounting.

Declining Balance

Higher loss in early years. More realistic for vehicles.

Current Value

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Total Lost

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Avg Loss / Year

—

so far

Depreciated Remaining Value

— —

Year-by-Year Schedule

Year	Book Value (Start)	Depreciation	Book Value (End)	% of Original

Fill in the details on the left and click Calculate to see the depreciation schedule.

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Summary

This calculator estimates how much value your car loses each year using either the straight-line method (equal loss every year) or the declining-balance method (steeper early losses, which mirrors real-world depreciation more closely). Enter the original purchase price, the useful life in years, a residual value, and the current age of the vehicle to see results instantly.

How it works

Enter the original purchase price of the vehicle.
Set the expected useful life (typically 5–10 years) and residual (salvage) value.
Choose a depreciation method: straight-line for equal annual loss, or declining-balance for front-loaded depreciation.
Enter the current age of the vehicle in years.
The calculator shows the current book value, total depreciation so far, and a year-by-year table.

Use cases

Estimate the current market value of a used car before buying or selling.
Understand how much a new car loses in its first few years.
Compare depreciation curves between straight-line and declining-balance methods.
Calculate remaining book value for accounting or insurance purposes.
Plan the best time to sell a vehicle to minimize total depreciation loss.
Evaluate whether leasing or buying makes more financial sense.

Frequently Asked Questions

Last updated: 2026-06-11 · Reviewed by Nham Vu