How we estimate depreciation
CarValue turns depreciation into a buy/hold/sell decision. Here's the model — and where it's an estimate.
The front-loaded curve
Depreciation isn't linear. Across the market, roughly half of a car's five-year value loss happens in year one, about 85% of it by year three, and then it flattens out. We use one universal curve of that shape and scale it to each model's published five-year depreciation, so a slow depreciator (a Tacoma) and a fast one (a luxury EV) share the shape but differ in magnitude.
value(age) = new price × [1 − depreciation₅ × shape(age)] × mileage factor
Mileage
A car with more miles than typical for its age is worth less, and fewer miles worth more. We adjust value by about 3% per 10,000 miles above or below the ~12,000‑miles‑per‑year baseline.
Why "buy after the cliff"
Because the curve is front-loaded, the dollars-per-year of depreciation are highest when a car is new and fall fast as it ages. Buying a few years old skips the steepest part. The numbers here are depreciation only — repairs and maintenance rise with age, which is why the practical sweet spot is usually three to five years old rather than "as old as possible."
What's an estimate
New prices and five-year depreciation rates are dated industry averages (see the date on each page) and vary by trim, options, condition, and local market. The shape curve and mileage factor are models, not guarantees. Always check a specific car's value before you buy or sell. Not financial or purchase advice.