Car Depreciation Calculator
Calculate how much value your car loses each year — the largest single cost of car ownership that most people overlook when budgeting for a vehicle.
Car Depreciation Guide
The Depreciation Curve
New cars depreciate fastest in the first three years — typically losing 40-60% of their value. The sharpest drop occurs in year one (15-35%) simply because the car is no longer 'new'. After year three, depreciation slows significantly. A car worth £25,000 new might be worth £15,000 after three years (£10,000 lost) then only fall to £11,000 by year six (£4,000 more). This is why buying a 2-3 year old car represents the best financial value — someone else absorbs the steepest part of the depreciat
Depreciation by Car Type
Mainstream cars (Ford Focus, VW Golf): retain approximately 40-50% after 3 years. Premium brands (BMW 3 Series, Audi A4): 45-55% retention due to strong brand demand. Luxury and performance cars: highly variable — Ferrari and Porsche 911 can appreciate; Range Rover, certain German luxury cars depreciate heavily (40% in 3 years) due to high maintenance costs affecting second-hand demand. Electric vehicles: higher initial depreciation than equivalent petrol (50-55% after 3 years in 2023-24) but im
High Mileage Impact
Average UK annual mileage is approximately 7,400 miles. Higher mileage reduces residual values: a car with 10,000 miles per year above average loses approximately 0.5-1p of value per additional mile. A 3-year-old car with 45,000 miles (15,000/year) may be worth £1,500-2,500 less than an identical car with 21,000 miles (7,000/year). For lease and PCP finance: excess mileage charges are typically 6-15p per mile — always calculate whether a higher mileage allowance contract is cheaper than the exce
Minimising Depreciation Loss
Strategies that slow depreciation: buy 2-3 years old in excellent condition (the new owner absorbs the worst drop). Choose colours with broad appeal (silver, grey, white, black) — unusual colours can cost 5-15% in residual value. Service history: full manufacturer service history significantly improves residuals — keep all stamps and invoices. Avoid high specification options on mainstream cars — they add more to new price than residual value. Consider nearly-new ex-demonstrator or ex-fleet cars
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