Depreciation and residual value calculator

Depreciation is the single biggest cost of car ownership with cars losing up to half their value in their first year. A wiser car buyer will make depreciation their friend. Use the calculator below to determine your car buying strategy.

Depreciation calculator

Select your car's depreciation category.
For guideance please see below under Depreciation Category
Manufacturer's list price
RRP or list price of new car
Actual price paid
Actual price paid for car when new
after dealer discount (if known)
Age of car - if new input 0
Mileage adjustment
Input mileage adjustment value
based on table below
Notional depreciation to date
The notional depreciation figure to date
based on the list price of the car
Actual depreciation to date
Actual depreciation to date based on the
purchase price of the car
Residual value
Value of car after
mileage adjustment
Notional depreciation %
Notional depreciation % (based on manufacturers recommended price)
Actual depreciation %
Actual depreciation % (based on actual
purchase price of car)
Residual value %
Residual value as a percentage of list price


The calculator on the left shows the depreciation and residual value of a car in good / above average condition. Depreciation of cars is often calculated on the manufacturer’s recommended price or list price which we have shown here as 'notional’ depreciation. A more meaningful concept however, is ‘actual’ depreciation calculated on the price actually paid for the car.

You can adjust depreciation for mileage by selecting an adjustment value, (see table below) for either below or above average mileage. The future value predictor (below right), predicts what your car may be worth at some point in the future. It is useful for determining the real cost of car ownership as well as the value of the balloon /GMFV on a PCP.

To determine the potential value of your equity on a PCP, complete both calculators and input the balloon /GMFV as quoted by your finance provider.

This calculator is for guidance only and should not be relied upon where an accurate valuation is required.

Mileage adjustment chart

  • 2 - Less than 5,000 miles per year
  • 1 - Between 5,000 & 8,000 miles per year
  • 0 - Between 8,000 & 12,000 miles per year
  • -1 - Between 12,000 & 15,000 miles per year
  • -2 - Over 15,000 miles per year

Depreciation category

  • Low - typically Porsches, Land Rovers, Audis & Mercedes
  • Moderate - typically BMW's, Jaguars, Minis and 4x4's
  • Average - typically Fords, Vauxhalls, mainstream Japanese and South Korean manufacturers, Skodas and Seats
  • High - typically Citroens, Peugeots, Fiats and Renaults
For a full list of car models and their depreciation category please click here. click here.

Future value predictor

Manufacturer's list price
RRP or list price of new car
Actual price paid
Actual price paid for car when new after
dealer discount (if known)
Projected age
Age of car at end of contract or at chosen
future date
Mileage adjustment
Input mileage adjustment value from
table on the left
Notional depreciation
The notional depreciation figure to date
based on the RRP of the car
Actual depreciation
Actual depreciation to date based on the purchase price of the car
Residual value  
Value of car at chosen date
GMFV /balloon payment
Balloon or GMFV provided by dealer if PCP
Projected equity
Predicted equity at the end of the contract
or chosen date

What is depreciation

selecting car iconDepreciation is by some distance the single biggest cost of car ownership. We understand that car buying can be an emotional challenge and all too often common sense flies out of the window when temptation comes a calling. But our job is to present the facts; and the facts are that depreciation is a hefty expense which can be managed only if you are prepared to take a pragmatic approach to car ownership.

Depreciation is the reduction in value over time and in the case of a car, the newer it is, the higher the rate of depreciation. An average car in the UK loses over 30% of its value in its first year so for a family saloon costing £18,000 the cost of depreciation in the first year of ownership will generally outstrip the cost of fuel by more than 3:1 with depreciation costing you over £6,000.

So, if you are not wed to the idea of a brand new car, your pocket would benefit hugely from buying second hand. For a better understanding of depreciation, check out our calculator and future value predictor, above. But to give you a flavour of the savings you could make, consider this scenario:

Jack has always bought a new car every three years and has a budget of £30,000 whilst his neighbour Jill (having consulted decided to buy her car on the second hand market. She also has a budget of £30,000 and intends to buy a one-year-old car and keep it for three years.

If you plug in these figures into the calculators above, you will see that Jill will be smiling in three years’ time. Although her running costs may be slightly higher than Jack’s, (as she may have had to pay for an extended warranty or run the car with no warranty for twelve months) her savings on depreciation will be a massive £10,000.

Cars depreciate at different rates; certain prestige cars such as Porsche, Land Rover and Audi for example tend to depreciate more slowly than average and of course mileage and condition play a part too; look after your car and it will retain more of its value. Even the colour of your car can affect the rate of depreciation. Our calculators will give you a good indication of depreciation and residual value for most cars in good /good-average condition and we have included a mileage adjustment tool for cars with lower or higher than average mileage.

Why do cars depreciate at different rates?

It comes down to supply and demand. Cars which are ‘sort after’ command higher prices on the second hand market and so retain their value better. Porsche is a prestige brand and demand generally outstrips supply; in simple terms there are more testosterone fuelled petrol heads who want to drive a Porsche than there are cars on the market and hence depreciation of the aforementioned sports car is low. A new model will generally retain its value better than an older one as it will be viewed as latest generation technology whereas, what you may describe as the run of the mill family saloon will tend to lose its value more quickly.

The rate at which a car depreciates is not a reflection on the quality of the car itself. If you read car reviews some really great cars depreciate at a very high rate. And don’t forget if you are buying second hand the high depreciators often offer jaw dropping value. How about a three-year old Jaguar XJ Supercharged 3Lt at £25000 which is a staggering £50,000 under list; and with 30,000 on the clock it’s hardly run-in!

So what does all this mean to you and your finances? The wiser car buyer will swim with the tide and take advantage of their knowledge. If you want to know more about the residual value or rate of depreciation of a specific car or model, you can get this information through CAP (or Parker’s Guide) an organisation which collates and interprets information which is used to value second hand cars.

new car keys

Four facts about car depreciation which a wiser car buyer should know:

  1. Cars depreciate most quickly in their first year and usually lose over 60% of their value within three years.
  2. High depreciators are best bought on the second hand market after depreciation has done its work on their value.
  3. The longer you own a car the less you have to worry about the rate of depreciation.
  4. Low depreciators generally offer best value for leasing and PCP deals (because the residual value is factored into the lease or finance cost).
* Our calculators are more accurate for cars up to ten years old and we suggest for models no longer in production you use the ‘average’ category unless you have specific knowledge about the car in question.

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                  Low                     Moderate         Low Moderate Average High     Average                     High                             Depn Unadjusted Low         Depn +1 unadjusted Moderate       Depn Adjusted  Average         Age=1 High         Depn +1 adjusted                                                                                                       Notional Depn                                       Notional Depn 2                                                     Notional Depn   Notional Depn 3