Car Depreciation Calculator – What’s My Car Worth Now?

You’ve probably heard it said that the value of a new car starts plummeting the minute a new owner drives it off the lot – and it’s true: As a general rule, new cars typically do immediately lose about 15% of their value as soon as they’re sold.¹

But, even if that “new car” concept of depreciation is widely understood, what happens after that isn’t always as clear cut¹ – and the fact is, there’s more than one reason why you might find yourself asking, “How much is my car worth?”

For example, perhaps you are considering trading in your car and want to know what to expect. Maybe you’re thinking about selling your car privately and need some guidance around setting a price. Or perhaps your car insurance is up for renewal, and you’re wondering whether your car’s value might affect your cover or your premium.

You might even be wondering how to calculate car depreciation if you’re shopping around for a used car and concerned about its resale value further down the track.

So how does car depreciation work? Do all cars depreciate at the same pace, or do factors such as a vehicle’s make and model, or wear and tear, affect depreciation rates? How do electric vehicles and classic cars fare when it comes to depreciation? And are you better off using a car depreciation calculator in Australia to work out how much a car’s value might have dropped, or is there a car depreciation formula you can apply yourself?

We’ve put this guide together to answer all of those questions, and more, starting with explaining what car depreciation actually is.

What is car depreciation?

Depreciation is the amount of money you lose on the value of a car over a period of time, from the moment you buy it up until the moment you sell it.²

“The biggest depreciation typically occurs in the first few years of ownership, meaning new vehicles generally depreciate faster than used vehicles,” says Ross Booth, Global General Manager of vehicle pricing information provider RedBook.

“Once a vehicle reaches a certain age, the rate of depreciation tends to moderate.”

How much does a car depreciate per year?

Depreciation rates can depend on a variety of factors, which we’ll go into more detail about later, but generally speaking, cars traditionally lose roughly 15% of their value each year.³

However, as Booth has pointed out, this pattern of diminishing value does tend to flatten out when a car reaches three to five years old.¹ A car valuation can also experience another notable drop around the time a factory warranty expires,¹ which is typically around the five- or seven-year mark.⁴

How to calculate depreciation of a car

To get an idea of how much a car might depreciate over a five year period – whether you’re thinking of a brand new one or one you’ve just bought – you can plug its purchase price into a car depreciation calculator.

That said, Booth has this advice: “Depreciation is becoming less predictable than it was historically. Changes in technology, global production patterns, pricing competition and shifting consumer preferences are causing residual values to move more dynamically than the traditional depreciation curves many consumers may be familiar with.”

What about working out business car depreciation for tax purposes?

For tax deduction purposes, the Australian Taxation Office (ATO) typically estimates that most cars depreciate by 25% every year.¹

This is because the ATO officially classifies motor vehicles, as well as some other business assets, as depreciating assets, recognising that they have a limited life and can be expected to decline in value over the time they’re used.⁵

A few things to bear in mind about depreciating business assets, including motor vehicles, is that the ATO:

• Allows depreciating asset deductions – If you have a car that you use for business, you may be able to claim a deduction for it, for income tax purposes.^5,6
• Has a car depreciation limit – The ATO regularly reviews and sets the highest value you can use to calculate depreciation on a car you use for business purposes. The car depreciation limit 2026-27 is $69,883.⁷
• Has a deduction tool – You can use the tool to help work out what type of deduction you may be able to claim for a vehicle that’s a depreciating business asset.

Why do cars depreciate in value?

Booth says supply and demand remain the dominant drivers of resale value and the motor vehicle depreciation rate.

“One of the biggest misconceptions about depreciation is that it’s solely determined by age,” he says.

“In reality, depreciation is dynamic and reflects a changing vehicle market and economic conditions, but the common thread is demand.”

While this helps explain why some classic cars may even appreciate in value, making them an investment opportunity in certain circumstances,⁸ it can apply to new cars too.

“Vehicles that are highly sought after in the new-car market generally continue to attract attention in the used-car market, supporting stronger residual values,” says Booth, who adds that Japanese manufacturers – Toyota in particular – tend to retain strong demand.

“Supply also plays a part, leading to less depreciation where demand is stronger than supply – the Suzuki Jimny is a good example of this.”

In contrast, Booth says vehicles that typically experience heavier depreciation are often those with narrower buyer appeal or where supply exceeds demand.

According to Booth, these can include vehicles:

• From brands with weaker market awareness or limited support networks
• With smaller buyer pools, such as niche or specialist vehicles
• In segments with limited appeal, such as large passenger sedans.

What else can affect used car depreciation in Australia?

Beyond general supply and demand, the future value of a used car on the Australian market may also hinge on its individual features, such as:

The car’s body type

Booth says that in addition to vehicles from brands with strong customer loyalty, dealer networks and reliability reputations, some types of cars tend to hold their value more than others.

“Generally speaking, mainstream medium and large SUVs – and 4x4 utes – remain among the strongest performers for retained value,” he notes. “Sedans, not so much.”

Booth explains this is because Australian buyers continue to favour SUVs due to their practicality, versatility and broad appeal, which helps sustain demand in the used market.

The car’s colour

“Neutral colours such as white, silver, grey and black typically appeal to the broadest range of buyers and can help maximise resale potential due to the fact they’re easier and therefore quicker to sell than cars with a polarising ‘loud’ colour,” says Booth.

The car’s odometer reading and its condition

Booth shares that two other major determinants when it comes to the value of a specific used vehicle are the car’s condition and how many kilometres it’s got on the clock.

“With the kilometres travelled, cars with lower-than-average kilometres generally support strong resale values,” he notes.

“And well-maintained vehicles with a complete service history typically attract stronger buyer demand too.”

How does depreciation impact the value of electric vehicles?

Booth says that pure electric vehicles (EVs), also known as battery electric vehicles (BEVs),⁹ have attracted considerable attention when it comes to depreciation in recent years. This is largely due to their rapid technology improvements, substantial new model introductions and aggressive new car price competition.

“As battery technology evolves, older EVs can appear outdated more quickly than traditional vehicles,” he says. “However, it would be incorrect to suggest that all EVs are poor performers. Outcomes vary significantly by brand, model and market positioning.

“Looking ahead, depreciation performance across EVs will increasingly depend on factors such as battery durability, charging infrastructure, price competitiveness and consumer acceptance.”

What about hybrid vehicles?

Booth explains that hybrid vehicles have generally proven to be more resilient than BEVs when it comes to depreciation, with some even outperforming the equivalent petrol vehicles.

“Hybrids combine familiar ownership characteristics of a petrol vehicle with improved fuel efficiency,” he says.

“They continue to appeal to a broad range of Australian consumers, and often benefit from strong demand in the used market due to lower petrol costs.”

How are Australia’s best-selling vehicles impacted by depreciation?

It depends on the vehicle, with some performing better than others.¹

For context, in 2025, the top-10 highest-volume selling new cars in Australia were:¹⁰

Best-selling car models with lower depreciation rates

Out of the models listed above, the following top-sellers experienced the lowest rates of depreciation over the past three years until early 2026:¹

• Toyota LandCruiser Prado VX 4WD – 19.52% depreciation
• Toyota HiLux SR5 Double Cab 4x4 Auto – 21.07% depreciation
• Toyota LandCruiser Prado GXL 4WD – 22.98% depreciation
• Toyota HiLux Workmate Double Cab 4x4 – 25.92% depreciation
• Toyota RAV4 Cruiser Hybrid 2WD – 26.67% depreciation.¹

Best-selling car models with higher depreciation rates

Meanwhile, the following models from the top-sellers list experienced the highest rates of depreciation over the past three years until early 2026:¹

• Tesla Model Y Long Range – 55.04% depreciation
• Tesla Model Y Performance – 48.60% depreciation
• Mazda CX-5 Maxx Sport FWD Auto – 47.24% depreciation
• Mitsubishi Outlander PHEV Exceed – 44.36% depreciation
• Mazda CX-5 GT AWD – 42.71% depreciation.¹

How might vehicle depreciation affect your car insurance at claim time?

The answer to this can depend on whether you’ve insured your car for its Market Value or an Agreed Value.

“If you take out a Comprehensive car insurance policy at Youi, you may have the option of choosing whether you want cover for the Market Value or Agreed Value of your vehicle,” explains Marni Jackson, Youi’s Head of Product – Vehicle and Lifestyle.

“And that choice affects how much you’re paid if your car is written off as a total loss, or stolen and not recovered.”

If you need to make a claim due to one of the above events, depreciation may typically come into play like this:

• Market Value – This is an estimate of what your car is worth immediately before an incident that led to a claim, based on market conditions and the condition of your vehicle at that time. Because vehicles typically depreciate over time, depreciation may be reflected in the Market Value assessed for your claim.¹¹
• Agreed Value – This is a fixed amount you and your insurer agree on when the policy starts, so while depreciation may be reflected in your car’s Agreed Value each time your policy renews, any depreciation that’s occurred during your policy term since your last renewal won’t reduce your payout.¹¹

How can car depreciation impact your premium at renewal time?

It depends. While a brand new luxury car will typically be more expensive to insure than a 10-year old runabout, depreciation on its own doesn’t necessarily guarantee lower premiums.¹²

One explanation for this is the fact that premiums are impacted by factors other than a car’s value, such as rising repair costs, general inflation and an increase in severe weather events.¹²

It’s worth noting, however, that Agreed Value premiums are typically higher than those for a Market Value policy because the Agreed Value for your car is often more than what it would sell for, taking a number of factors including depreciation into account, at the time it was damaged or stolen.¹¹

​Whether you’re tracking your car’s worth to understand what its resale value for a future sale might be or you’re keen to understand how depreciation may impact the Market Value of your vehicle, hopefully, this guide has given you a clearer picture of how car depreciation works and what it might mean for your vehicle’s value over time.

And, if you’d like to explore whether one of Youi’s car insurance options might be a bit more you-shaped, consider starting a quote online or giving us a call on 13 9684.

¹ Source: Savings.com.au – How do I calculate depreciation?, March 2026
² Source: carsales – What is depreciation?, September 2021
³ Source: CarBuyers – Understanding Car Depreciation in Australia, June 2024
⁴ Source: Canstar – What is a Car Warranty and What Does it Cover in Australia?, April 2025
⁵ Source: Australian Taxation Office – What is a depreciating asset?, May 2021
⁶ Source: Australian Taxation Office – Depreciating assets you use for work, June 2026
⁷ Source: Australian Taxation Office – Car thresholds from 1 July, June 2026
⁸ Source: SEA GO International – From Garage to Goldmine: How Classic Cars Are Becoming Australia’s Investment Sweet Spot, June 2024
⁹ Source: Green Vehicle Guide – Types of electric vehicles explained, n.d.
¹⁰ Source: carsales (business) – VFACTS 2025: Another record year for Australian new car sales, n.d.
¹¹ Source: Canstar – Car Insurance Market Value vs Agreed Value, April 2025
¹² Source: Canstar – Car insurance premium increases: Why do costs go up?, May 2025