A car depreciates in value by 15% each year. If the car was purchased for $30,000, what will its value be after 3 years?

Sat, 02 May 2026 17:34:41 +0000

**A car depreciates in value by 15% each year. If the car was purchased for $30,000, what will its value be after 3 years?** Why are more drivers and financial planners turning their attention to the steady decline in a car’s value? With sharp bullets of depreciation—often around 15% annually—owners now face critical questions about long-term investment and budgeting. For those who bought a 2027-model sedan at $30,000, understanding how that price evolves over time isn’t just financial sense—it’s practical realism. When compounded yearly, this 15% drop reshapes ownership costs and trade-in potential. The math behind this depreciation pattern is clear, transparent, and central to smart vehicle ownership in the U.S. market. **Why depreciation matters and why it’s happening**
In the U.S., cars lose significant value as soon as they leave the dealership. On average, vehicles depreciate by about 15% in the first year and continue losing roughly 10–15% annually thereafter, depending on make, model, and market forces. This pattern reflects supply-demand imbalances, technological obsolescence, and shifting consumer preferences. Today’s emphasis on fuel efficiency, electric vehicles, and cost-conscious ownership amplifies historical depreciation trends, making current calculations more relevant than ever for buyers and sellers alike. **Calculating the value after 3 years—step by step**
Using the initial price of $30,000 and a consistent 15% annual depreciation, here’s how value erodes over time:
- After Year 1: $30,000 × 0.85 = $25,500
- After Year 2: $25,500 × 0.85 = $21,675
- After Year 3: $21,675 × 0.85 = $18,423.75