Car Depreciation Rate by Year
How much a vehicle loses each year, for every vehicle type, plus the formula to work it out yourself.
Average depreciation rate
The rule of thumb: a new car loses about 20% in its first year, then 12–16% of what's left each year until about year five, and roughly 10% a year after that. Five years in, it's worth around 40% of the sticker price. Trucks lose less, EVs and luxury cars more.
Share of value lost each year
Percent of the start-of-year value lost in that year, average model and mileage.
| Loss in year | 1 | 2 | 3 | 4 | 5 | 6 |
|---|---|---|---|---|---|---|
| Car (sedan / hatchback) | 21% | 17% | 16% | 14% | 13% | 10% |
| Luxury car | 26% | 19% | 17% | 15% | 13% | 10% |
| SUV / crossover | 19% | 15% | 14% | 13% | 12% | 9% |
| Pickup truck | 16% | 12% | 11% | 10% | 9% | 8% |
| Electric vehicle | 30% | 20% | 15% | 13% | 11% | 9% |
| Hybrid | 18% | 13% | 12% | 11% | 10% | 9% |
| Motorcycle | 22% | 12% | 10% | 9% | 8% | 7% |
| RV: Class A motorhome | 25% | 10% | 9% | 8% | 7% | 6% |
| RV: Class B / C motorhome | 20% | 9% | 8% | 7% | 7% | 6% |
| Travel trailer / camper | 22% | 10% | 9% | 8% | 7% | 6% |
| Fifth-wheel trailer | 21% | 10% | 8% | 8% | 7% | 6% |
| Boat | 12% | 9% | 8% | 7% | 6% | 5% |
Share of original price left
| Value left after | 1 | 2 | 3 | 5 | 7 | 10 |
|---|---|---|---|---|---|---|
| Car (sedan / hatchback) | 79% | 66% | 55% | 41% | 33% | 24% |
| Luxury car | 74% | 60% | 50% | 37% | 30% | 22% |
| SUV / crossover | 81% | 69% | 59% | 45% | 38% | 28% |
| Pickup truck | 84% | 74% | 66% | 54% | 46% | 36% |
| Electric vehicle | 70% | 56% | 48% | 37% | 31% | 23% |
| Hybrid | 82% | 71% | 63% | 50% | 42% | 31% |
| Motorcycle | 78% | 69% | 62% | 52% | 45% | 36% |
| RV: Class A motorhome | 75% | 68% | 61% | 53% | 46% | 39% |
| RV: Class B / C motorhome | 80% | 73% | 67% | 58% | 51% | 43% |
| Travel trailer / camper | 78% | 70% | 64% | 55% | 48% | 40% |
| Fifth-wheel trailer | 79% | 71% | 65% | 56% | 49% | 41% |
| Boat | 88% | 80% | 74% | 64% | 58% | 50% |
Model estimates built from published averages (Carfax, Kelley Blue Book, Edmunds, iSeeCars five-year studies, J.D. Power RV values). Individual models vary widely; use the calculator for your own vehicle.
- Year 1$30,000 × (1 − 20%) = $24,000
- Year 2$24,000 × (1 − 15%) = $20,400
- Year 3$20,400 × (1 − 15%) = $17,340
Total depreciation: $12,660, or 42% of the price. Note how each year's rate is applied to a smaller number, so the dollar drop shrinks even if the rate stays the same.
How to calculate car depreciation
- Find the starting value: the price you paid, or today's market value for a used car.
- For each year, multiply the value by (1 − that year's rate).
- Subtract the final value from the starting value to get total depreciation; divide by the starting value for the percentage.
- Divide total depreciation by the months you own the car to see its monthly cost.
Tax depreciation is different: the IRS uses fixed percentages of cost (MACRS), not market value. See the business vehicle calculator.
Questions people ask
What is the average car depreciation rate?
About 20% in the first year and roughly 12–16% of the remaining value in each of the next four years, then about 10% a year. After five years the average new car is worth around 40% of its price, in line with Carfax's widely cited estimate.
How do you calculate car depreciation?
Multiply the value at the start of each year by (1 − that year's rate). For a $30,000 car at 20% then 15%: after year one 30,000 × 0.80 = $24,000; after year two 24,000 × 0.85 = $20,400. Total depreciation is the price minus the current value.
What is the formula for car depreciation?
Value after n years = Price × (1 − r₁) × (1 − r₂) × … × (1 − rₙ). With a single constant rate r this is Price × (1 − r)ⁿ. Depreciation percentage = 1 − value ÷ price.
What vehicle depreciates the least?
Pickup trucks and rugged SUVs usually depreciate the least, along with models from brands with strong reliability reputations (Toyota, Lexus, Honda, Porsche). See the cars that hold their value page for details.
Is the depreciation rate the same every year?
No. The rate is highest in year one because the car stops being "new" and the dealer margin disappears. After that it drops and levels off, and in dollars the loss keeps shrinking because the rate applies to a smaller value.