Car Depreciation Calculator
Estimate your car's value over time using average UK depreciation curves.
Source: GOV.UK – Buying a car
By Konstantin Iakovlev · Founder, Calks.uk
Last updated: · Verified against HMRC and GOV.UK 2026/27 rates
Current Value
£25,000.00
Total Depreciation
£12,747.76
| Age | Value | Year's Loss | Total Lost |
|---|---|---|---|
| 0 (now) | £25,000.00 | £0.00 | |
| 1 | £20,000.00 | £5,000.00 | £5,000.00 |
| 2 | £17,000.00 | £3,000.00 | £8,000.00 |
| 3 | £14,960.00 | £2,040.00 | £10,040.00 |
| 4 | £13,464.00 | £1,496.00 | £11,536.00 |
| 5 | £12,252.24 | £1,211.76 | £12,747.76 |
Disclaimer
This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.
How It Works
Cars lose value from the moment they leave the showroom. UK data shows new cars typically lose 15–25% of their value in the first year and 50–60% over three years. Depreciation slows significantly with age — an 8-year-old car loses far less in absolute terms each year than a brand new one.
This calculator uses the declining balance method: each year the car retains a fixed percentage of its previous value. Retention rates vary by fuel type and model — EVs currently depreciate faster than average due to rapid technology change, while popular mainstream models hold value relatively well.
Key depreciation drivers: fuel type, annual mileage (vs 12,000-mile industry benchmark), full service history, number of owners, condition, and ULEZ compliance status which increasingly affects older petrol and diesel values in urban areas.
UK car depreciation realities 2026. Average new car loses 20-30% in year 1; 40-50% over 3 years; 60-70% over 5 years (Cap HPI data). Premium luxury (BMW 7-series, Mercedes S-Class): 65-75% loss over 5 years. Mid-market family cars (Ford Focus, VW Golf): 50-60% over 5 years. Best retainers: Toyota Hilux, Land Rover Defender, Porsche 911 — 30-40% loss over 5 years. EVs: faster depreciation than petrol in 2024-2026 due to battery tech evolution and oversupply.
Why cars depreciate — key factors. Mileage: high mileage (15,000+/year) = 5-15% extra depreciation. Service history: full main-dealer history adds 5-10% resale value. Colour: black/white/silver retain value; bright colours (orange, yellow) lose 10-15%. Modifications: cosmetic/aftermarket = 5-20% value loss. Accidents (Cat S/N): typically 20-40% value reduction even when fully repaired. Brand and model: depreciation curves vary massively.
EV vs petrol depreciation 2026. Tesla Model 3 (2-3 years old): 40-50% loss vs RRP. Polestar 2: 50-60%. Audi e-tron: 60-70% (premium EVs hit hardest). MG4: similar to ICE depreciation (cheaper RRP = less to lose). Petrol Ford Focus (3 years): 45-55% loss. Diesel cars: faster depreciation post-2020 due to ULEZ/ZEV concerns. Best EV value retention: Tesla Model 3 (strong brand demand), Hyundai Ioniq 5 (long warranty + range).
How to minimise depreciation. Buy 1-2 year old: avoid steepest first-year loss (£5,000-£10,000 saved on £30k car). Choose colour wisely (white/silver/black). Service at main dealer (or specialist) and keep records. Avoid modifications. Drive carefully — no Cat S/N history. Choose strong-retaining brands (Toyota, Honda, Land Rover, Porsche). Keep mileage below 12,000/year if possible. Sell privately (not trade-in): 10-20% more typical.
Lease vs buy implications. Lease (PCH): you pay for the DEPRECIATION (manufacturer keeps the car). £30k car losing £15k over 3 years: monthly lease ~£420 covers depreciation + interest. Buying: you absorb depreciation directly. Lease advantage: depreciation risk transfers to lessor. Buy advantage: keep car beyond lease, depreciation curve flattens after year 5. Long-term keepers (7+ years): buying wins financially. Switch-every-3-years: lease wins on convenience and predictable cost.
Example: £30,000 petrol car with 20% annual depreciation
- Year 1: £30,000 × 0.80 = £24,000 (lost £6,000)
- Year 2: £24,000 × 0.80 = £19,200 (lost £4,800)
- Year 3: £19,200 × 0.80 = £15,360 (lost £3,840)
- After 3 years: 51% of original value retained; total loss £14,640
Source: GOV.UK – Buying a car
Frequently Asked Questions
- How much does a new car depreciate in the first year?
- New cars typically lose 15–25% of their value in the first year. After three years, most cars have lost 40–60% of their original value. Depreciation slows considerably in subsequent years as the steepest drop occurs early.
- Which cars depreciate the least in the UK?
- Cars that hold their value best in the UK include popular mainstream models with strong demand and low running costs: Toyota RAV4, Volkswagen Golf GTI, Porsche 911, and most Volkswagen Group vehicles. Limited-edition models and German premium brands often retain value well.
- Do electric cars depreciate faster than petrol?
- Currently, EVs depreciate faster than equivalent petrol cars in the UK, primarily due to rapid battery technology improvements making older models feel outdated, range anxiety concerns about ageing batteries, and a less established used market. This is expected to stabilise as EV adoption increases.
- How does depreciation affect car finance?
- Depreciation is the largest cost of car ownership and is built into PCP (Personal Contract Purchase) finance. PCP monthly payments are based on the difference between the purchase price and the Guaranteed Minimum Future Value (GMFV) at the end of the term, plus interest. Understanding depreciation helps you negotiate better PCP terms.