How the estimate is calculated

Calculation formula

Your car’s original purchase price is our starting point. We then adjust that price for age, type, model, miles and condition, one factor at a time. Depreciation is the decline in a car’s value over time.

We call the number used at each step a factor. The price gets multiplied by it. For instance, 0.84 leaves 84% of the value in place, and a factor above 1 lifts it slightly.

Vehicle age factor

A car's greatest value loss occurs during its first few years. The well-known car price guide Kelley Blue Book (KBB) reports that cars retain about 84% of their price after one year. At five years, they retain about 45%.

Carfax keeps car history reports. The company says a new car gives up about 10% of its value in month one. This means cars from this year or next year begin at 90%. Once a car reaches five years, it loses about one tenth of its remaining value each year. Our lowest figure is $500. When 3% of the new price is higher, that amount is used instead.

Vehicle type and model factors

Some vehicle types hold their value better than others. The car shopping website iSeeCars studied 950,000 five-year-old cars. Those cars were down 41.8% in value on average. Trucks and hybrids lost less value, so we raise their estimate a little. A hybrid pairs a gas engine with an electric motor. We lower the estimate for SUVs and electric cars because they lost more value.

When your chosen make and model are part of the study, we make another adjustment based on that model’s results.

Mileage and the car's condition

We expect a car to travel about 12,000 miles each year. Driving more miles lowers the value somewhat, while fewer miles raises it somewhat, though only to a point. When you leave mileage blank, we apply 12,000 miles a year and note that in the result.

The car's condition then raises or lowers the value. Excellent adds 8%, Good doesn't change the value, Fair subtracts 15% and Poor subtracts 35%. The result also includes a note when you select Poor. A salvage or rebuilt title means an insurance company once considered the car not worth repairing. It usually subtracts another 20 to 40%.

Rounding figures and showing ranges

These calculations lead to a main estimate: the private party value. If you sell the car yourself, another person might pay you about that amount. When you buy another car and trade yours in at a dealer, the dealer usually pays about 15% less. This amount is the trade-in value. Dealer retail is the price a dealer would ask, which is about 18% more.

Each value appears as a range spanning about 6% below to 6% above, with both ends rounded to the closest $100. Our figures also account for changes in used-car prices throughout the U.S. after we gathered them, based on a monthly U.S. government price figure.

Examples of the calculation

Two examples with real numbers are shown here. The first example is a 2021 Honda Civic. It was $23,000 when new, it has 61,000 miles and its condition is Good. The second example is a 2019 pickup truck. It was $45,000 when new, it has 110,000 miles and its condition is Fair. Whenever we update the site, we confirm that the calculator still produces the same results.

Sources

Public sources provide all the figures listed here. The details from each source are listed next.

• Kelley Blue Book, car depreciation: how much value remains on average at years 1 to 5, and then yearly drops of 8 to 12%.
• iSeeCars study of cars that hold value: 2026 edition, listing five-year losses for each vehicle type and model.
• The U.S. road safety agency provides NHTSA vPIC, which lists makes and models for us. The service reads the VIN, a 17-character car identification number, and enters the vehicle's year, make and model.
• Within the Consumer Price Index (CPI), the Bureau of Labor Statistics (BLS) issues a monthly index for used cars and trucks. BLS, the U.S. government office, tracks prices. That series carries the code CUSR0000SETA02.
• Carfax reports a 10% drop in a car's first month, and that applies at age 0.