Calculate Your
Car Depreciation
Fast. Simple.
car valuations for Aussies
When you buy a car, its value drops the moment you drive it off the lot. Our Car Depreciation Calculator – Australia helps you estimate your car’s worth over time, using ATO-approved methods. Stay informed and plan smarter.
Car Depreciation Calculator - Australia
Just fill in the basics and check out a 8-year value guide.
Check our other calculators
more ways to plan smarter.
Explore our full suite of calculators designed for drivers, fleets, and businesses.
Losing value?
there's a calculator for that.
Hold Steady.
Depreciation Down.
Powered by smart choices, keeping your mileage low, staying on top of servicing, and knowing when to sell all help your car hold its value. Small steps today can make a big difference tomorrow.
Keep mileage low
If you drive more than average, a brand-new car may not be the smartest choice.
Keep mileage low
Maintaining a complete service history with a trusted dealer helps protect your car’s value and boosts buyer confidence.
Keep mileage low
While it might feel tempting, those choices can end up reducing your car’s value over time.
Pick popular colours
Cars in classic, desirable colours tend to hold their value better, as more buyers are looking for them when it’s time to resell.
Sell smart
Maintaining a complete service history with a trusted dealer helps protect your car’s value and boosts buyer confidence.
Watch new models
When a new version hits the market — especially one with a fresh design or facelift — your current car is likely to lose value more quickly.
Prestige or practicality.
The choice shows.
Luxury cars don’t just cost more upfront — they lose more, faster.
With a steep 20–30% drop in the first year and as much as 80 –85% gone by year eight, prestige often comes with the price of rapid decline. Big price. Bigger fall.
Up to
85% value lost
within 8 years
Economy cars
Affordable. Reliable. Resilient.
With only a 10–15% drop in the first year and around 60-70% gone by year eight, their practical appeal and stronger resale demand make them a smarter, steadier investment.
Up to
60-70% drop
within 8 years
Comparison block.
Luxury cars
High running costs.
Smaller used market.
Economy cars
Lower running costs.
Wider buyer demand.
Lose 20-30%
in year one
Up to
30% gone
by year five
Up to
85% gone
by year eight
Lose 10-15%
in year one
Around
50% gone
by year five
Around
60-70% gone
by year eight
Notes: Figures are indicative ranges from typical market behaviour in Australia. Actual depreciation varies by make, model, km, condition, and demand.
Business ready. Depreciation done.
Consistency or acceleration. Your strategy decides.
Even and steady.
Prime Cost keeps it simple — you claim the same deduction each year across the car's effective life. Predictable, balanced, and easy to plan around.
Front-loaded. Faster early.
Diminishing value is different — it gives you bigger deduction in the first few years, then gradually eases off. Ideal if you want to recover more upfront, while the car is at its highest value.
Both methods are ATO-approved. Choose steady or front-loaded.
A closer look.
$55,000 purchase
100% business use · 8-year life
Prime cost
Diminishing value
in year one
$5,500
deductible (before caps)
in year one
$13,750
deductible (before caps)
in year five
$5,500
each year, steady and predictable
in year eight
$5,500
each year, steady and predictable
in year five
$4,350
deductible (before caps)
in year eight
$1,835
deductible (before caps)
later years
Phasing down
gradually less each year as the value declines
Notes: Figures are indicative ranges from typical market behaviour in Australia. Actual depreciation varies by make, model, km, condition, and demand.
FAQs,
answered.
-
What does car depreciation really mean?
Car depreciation is the natural drop in your car’s value over time. The moment it leaves the showroom, its worth starts to fall — whether it’s for personal use or a business vehicle.
-
How much does a car depreciate per year?
On average, most cars lose around 15–25% of their value each year. By the 8th year, many vehicles have already lost 60–85% of their original value — though brand, model, mileage, and condition make all the difference.
-
Why does the ATO care about business car depreciation?
For business owners, car depreciation isn’t just numbers — it’s a tax deduction tool. The ATO lets you claim part of your car’s decline in value as a business expense, lowering your taxable income.
-
What’s the difference between prime cost and diminishing value methods?
-
Prime cost method → spreads the depreciation evenly each year (steady, predictable).
-
Diminishing value method → front-loads the deduction, giving you bigger claims early, then tapering off.
-
Which method is better for my business car?
If you prefer consistent deductions, prime cost works best. If you want faster write-offs upfront, diminishing value is your friend. The ATO lets you choose.
-
Can I claim car depreciation if I use the car for both work and personal trips?
Yes — but only the business-use percentage is deductible. For example, if your car is 70% business and 30% personal, only 70% of the depreciation counts for tax.
-
How do I calculate my business car depreciation?
Start with the purchase cost of your car (up to the ATO’s car limit), then apply either the prime cost or diminishing value method. Tools, calculators, or your accountant can crunch the exact numbers.
-
Does depreciation affect the resale value of my car?
Absolutely. Cars with higher depreciation rates will be worth less when you sell. Smart buyers often look at brands and models with slower depreciation to get better long-term value.
-
Can I write off the full cost of my car in one year?
Not always. The ATO has limits on instant asset write-offs and depreciation caps. Unless your business qualifies under special rules, most cars must depreciate over their effective life — typically 8 years.
-
What’s the smartest way to manage car depreciation for tax purposes?
Plan ahead. Choose the right method (prime cost vs diminishing value), keep accurate business-use records, and talk to your accountant about ATO rules. Done right, business car depreciation can save you thousands.
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