Estimate your vehicle value over 5 years based on fuel type and mileage
Depreciation estimates are based on UK average rates and may vary significantly by make, model, condition, and market conditions. Use as a guide only.
Car depreciation is the single largest cost of vehicle ownership in the UK, often exceeding fuel, insurance, and maintenance combined. A new car loses an average of 60% of its value within the first three years, with the steepest drop occurring the moment you drive it off the forecourt. Understanding how depreciation works helps you make smarter buying decisions and potentially save thousands of pounds over your ownership period. The rate at which a vehicle depreciates depends on several factors. Fuel type plays a significant role: electric vehicles currently depreciate faster in their first year due to rapid technological improvements and new models entering the market, but they tend to hold value better from year three onwards as the second-hand EV market matures. Petrol and diesel cars follow more predictable depreciation curves, while hybrids often sit somewhere between the two. Annual mileage is another critical factor. The average UK driver covers around 7,400 miles per year according to the Department for Transport, but those who drive significantly more will see their vehicle lose value faster. A car driven 30,000 miles per year can depreciate up to 20% faster than one driven at the national average. Conversely, keeping mileage below 5,000 miles per year can slow depreciation by around 10%. This calculator estimates your vehicle value over five years based on purchase price, vehicle age, fuel type, and annual mileage. It uses UK-specific depreciation curves derived from average resale values across major used car platforms. While actual depreciation varies by make, model, colour, condition, and market demand, these estimates provide a reliable guide for budgeting and financial planning.
To estimate your vehicle depreciation: 1. Enter the purchase price of your vehicle. This should be the price you paid or expect to pay, including any options or extras but excluding finance charges. For new cars, use the on-the-road price from the dealer or manufacturer website. 2. Set the vehicle age in years. Enter 0 for a brand-new vehicle. If you are buying a used car, enter its current age. The calculator adjusts the starting value based on typical depreciation for the vehicle age, then projects forward for five years from that point. 3. Select your fuel type. This affects the depreciation curve applied: electric vehicles lose more in year one but stabilise sooner; petrol and diesel follow traditional depreciation patterns; hybrids blend both characteristics. 4. Choose your expected annual mileage. Lower mileage preserves value, while higher mileage accelerates depreciation. Select the option closest to your actual or planned annual driving distance. 5. Review the year-by-year value breakdown. The chart shows how your vehicle value declines over five years, while the summary figures show total depreciation in pounds and as a percentage, plus the average monthly cost of depreciation. Use the monthly depreciation figure when comparing the true cost of owning different vehicles.
The depreciation calculation uses a year-by-year compound model with variable rates: Year 1 depreciation (new car): 15-35% depending on fuel type. Petrol averages 25%, diesel 22%, hybrid 20%, and electric 35%. This steep first-year drop reflects the premium buyers pay for a brand-new vehicle that immediately becomes second-hand. Year 2 depreciation: 10-15% of the remaining value. The rate slows as the initial new-car premium has already been absorbed. Year 3 depreciation: 8-12% of the remaining value. By year three, the vehicle has settled into a more predictable depreciation pattern. Years 4-5 depreciation: 6-8% of the remaining value per year. Depreciation continues to slow as the vehicle approaches a floor value. A mileage adjustment factor is applied to each year. At 5,000 miles per year the factor is 0.9 (slower depreciation), at 10,000 it is 1.0 (baseline), at 15,000 it is 1.05, at 20,000 it is 1.1, and at 30,000 it is 1.2 (faster depreciation). For example, a GBP 25,000 new petrol car driven 10,000 miles per year: Year 1 value = 25,000 x (1 - 0.25 x 1.0) = GBP 18,750. Year 2 value = 18,750 x (1 - 0.12 x 1.0) = GBP 16,500. The total five-year depreciation is the purchase price minus the value at the end of year five, and the monthly depreciation cost divides that figure by 60 months.