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.
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Car Depreciation Guide
What's the key thing to understand about 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
What's the key thing to understand about 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 improve significantly with each generation as battery technology matures and residual confidence in the used EV market grows.
What's the key thing to understand about 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
What should I know about 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, which have already absorbed the steepest first-year drop while still being close to new condition, often saving 20-30% versus buying brand new.