Depreciation Calculator UK
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🚗 Mileage-based depreciation · UK 2026

Mileage Depreciation Calculator UK

Estimate how much mileage affects your car, van, taxi or fleet vehicle value. Use per-mile depreciation, expected life miles, excess mileage adjustments and HMRC mileage guidance to plan resale value, business use and total ownership cost.

7,100
average car miles/year benchmark
55p
2026/27 first 10k AMAP rate
25p
business miles after 10k
3
mileage methods included
Important 2026 update: Mileage depreciation is a planning and accounting estimate, not an automatic HMRC tax claim. For employees and self-employed mileage records, GOV.UK lists approved mileage rates for 2026/27 at 55p per mile for the first 10,000 business miles for cars and vans, then 25p per mile after that. Actual vehicle purchase costs and capital allowance claims follow separate rules.

Mileage Depreciation Calculator

Choose the quick per-mile estimate, detailed mileage schedule or business mileage comparison. Results are designed for planning resale value, not for filing a tax return without professional review.

Use this tab when you know the vehicle’s current value and want a simple estimate of depreciation caused by a given mileage increase.

Use a current market value from Auto Trader, CAP HPI, Parkers or a dealer valuation.
These are planning assumptions. Higher-value vehicles often lose more pounds per extra mile.
Enter the additional mileage you expect to add before sale or review.
Use 10,000 miles if comparing to many used-car adverts and finance assumptions.

Build a year-by-year depreciation schedule using the units of production method: depreciable value divided by expected life miles, multiplied by miles used.

Estimated value at the end of useful mileage life.
Common planning range: 100k–150k for cars, higher for vans/taxis.

Compare HMRC-style mileage allowance planning against estimated actual vehicle cost. This helps sole traders and employers understand whether mileage reimbursement looks reasonable, but it is not a substitute for tax advice.

Tyres, servicing, insurance allocation, repairs and maintenance.

What Is Mileage Depreciation?

Mileage depreciation is the reduction in a vehicle’s value caused by use. Age matters, but mileage tells buyers how much work the car has actually done. Two identical three-year-old cars can have very different values if one has covered 18,000 miles and the other has covered 78,000 miles. The higher-mileage car has more wear on the engine, gearbox, suspension, brakes, tyres, seats and interior, so the market normally prices it lower.

For private buyers, mileage depreciation helps you decide whether a cheap high-mileage car is genuinely good value. For business users, it helps estimate the real cost of using a vehicle for sales routes, deliveries, taxi work, site visits or commuting between business locations. For fleet managers, it helps decide whether to rotate vehicles earlier, set mileage limits, or recharge drivers for excess mileage.

The simplest approach is a pounds-per-mile estimate. If a car is expected to lose 16p for every additional mile and you plan to add 12,000 miles before selling it, the mileage-related value loss is about £1,920. A more formal accounting approach is the units of production method, where depreciation is based on useful life miles rather than years. That method can be helpful when mileage is the main driver of economic use.

Practical rule: use mileage depreciation for planning and pricing, but use official HMRC rules for tax claims. The calculator shows the economics of vehicle use; tax treatment depends on whether you are an employee, sole trader, partnership or limited company.

UK Mileage Depreciation Benchmarks 2026

Use these planning bands to choose a sensible per-mile rate. The exact value depends on make, model, condition, fuel type, warranty status, service history and market demand.

City cars

Small petrol city cars

8p–12p

Low purchase prices mean the pound loss per mile is often lower, but very high mileage can make small cars harder to sell privately.

Popular

Superminis & hatchbacks

12p–16p

Strong demand keeps values stable, but mileage above the common 10,000-mile advert benchmark still reduces buyer interest.

Family

Crossovers & family SUVs

15p–22p

Heavier vehicles often have higher tyre, brake and suspension wear, so mileage adjustments can be more visible at resale.

Premium

Executive cars

18p–28p

Premium cars lose more pounds per extra mile because the starting value is higher and buyers expect a strong service history.

EV

Electric cars & hybrids

14p–24p

Battery health, charging habits and remaining warranty matter as much as mileage. Popular EVs with good range can still sell strongly.

Fleet

Vans, taxis & work vehicles

18p–35p

Commercial buyers expect higher mileage, but condition, maintenance records and payload use become critical value factors.

How the Calculator Works

The quick calculator uses a simple per-mile rate. You enter the current value, choose a vehicle type and add the extra miles you want to model. The result estimates the mileage-related value loss and the likely value after those miles. This is ideal for quick resale planning, excess mileage decisions and comparing whether a cheaper high-mileage car is worth the saving.

The schedule tab uses the units of production method. It first calculates depreciable value by subtracting residual value from starting value. It then divides that amount by expected life miles to create a cost per mile. Every year in the projection, it multiplies that per-mile charge by the miles driven in that year. This method is logical where the vehicle is consumed mainly through use rather than time.

The business tab compares approved mileage-style reimbursement against your estimated actual operating cost. It separates fuel or charging, depreciation and other running costs. That makes it easier to see whether a mileage rate covers your real cost per journey. For employees, employer mileage payments are governed by approved mileage allowance rules. For self-employed users, simplified expenses can be used by sole traders and eligible partnerships, while actual costs and capital allowances are a separate route.

Why the same mileage can affect cars differently

  • Brand and model demand: a Toyota hybrid, Porsche sports car or well-kept Land Rover may absorb mileage differently from a less desirable model.
  • Service history: full service history, MOT records and correct timing-belt or battery checks can reduce the mileage penalty.
  • Type of miles: motorway miles usually create less wear than stop-start city driving, delivery routes or private hire work.
  • Fuel type: diesel, petrol, hybrid and electric cars have different buyer expectations and different average annual mileage patterns.
  • Age interaction: a one-year-old car with 30,000 miles can look heavily used; a ten-year-old car with 90,000 miles may look normal.
Accounting note: UK businesses can choose a depreciation method that reflects how an asset’s economic benefits are consumed. If mileage is the main use pattern, a usage-based method can be easier to explain internally, but tax deductions are still calculated under HMRC rules rather than your management estimate.

Mileage Depreciation and HMRC Rules in 2026

It is important not to mix up three different ideas: market depreciation, accounting depreciation and tax relief. Market depreciation is the real-world fall in resale value. Accounting depreciation is the charge recorded in business accounts. Tax relief is the amount HMRC allows you to deduct from taxable profit. These three numbers can be different even for the same vehicle.

For employees using their own cars for business travel, approved mileage allowance payments set the tax-free mileage framework. For 2026/27, the published GOV.UK table shows cars and vans at 55p for the first 10,000 business miles in the tax year and 25p for each business mile over 10,000. Those rates are designed to cover fuel, depreciation and running costs together; they are not a separate depreciation allowance.

For self-employed sole traders, simplified expenses allow eligible businesses to use flat mileage rates instead of working out actual vehicle costs. GOV.UK states that simplified expenses can be used by sole traders and business partnerships with no companies as partners, but not by limited companies. If you use actual costs instead, you track fuel, repairs, insurance and other business costs, and vehicle purchase costs may be handled through capital allowances where the rules allow.

For business cars, capital allowances depend on the car and its CO₂ emissions. GOV.UK lists 100% first-year allowances for new and unused zero-emission/electric cars bought before April 2027, main rate allowances at 14% from April 2026 for qualifying lower-emission cars and second-hand EVs, and special rate allowances at 6% for cars over the relevant emissions threshold. This is why a mileage depreciation estimate should sit alongside, not replace, your tax computation.

When this calculator is most useful

  1. Before buying a used car: compare a cheaper high-mileage model with a lower-mileage alternative.
  2. Before returning a lease or PCP car: estimate whether excess mileage charges roughly match the real value effect.
  3. For fleet planning: decide whether vehicles should be replaced at 60,000, 80,000 or 100,000 miles.
  4. For self-employed budgeting: understand how much each business mile costs after fuel, depreciation and maintenance.
  5. For sale timing: identify when the car will cross important mileage markers such as 30k, 60k, 80k or 100k miles.

How to Reduce Mileage Depreciation Before You Sell

You cannot remove miles from a car, and you should never rely on mileage alone to value a vehicle. What you can do is reduce the uncertainty that makes buyers discount high-mileage cars. A high-mileage vehicle with clean MOT history, matching tyres, evidence of regular servicing and receipts for major work will usually achieve a stronger price than a lower-mileage car with patchy records.

Start by checking the mileage story. Make sure the odometer reading matches MOT history, service invoices and any finance or lease records. Buyers are nervous when mileage records jump inconsistently or disappear for several years. If the car has done above-average miles, explain the type of use honestly. Long motorway commutes are often easier to accept than constant short urban trips, especially for diesel cars and vans.

Next, prepare the car for valuation. Replace worn tyres, repair obvious warning lights, remove business branding carefully, deep-clean the interior and gather every invoice in date order. Small cosmetic issues can make mileage feel worse because buyers assume the whole car has been worked hard. A clean, well-documented high-mileage car can still be a sensible purchase when priced correctly.

Finally, compare your car against live adverts with similar mileage, not just similar age. A five-year-old car with 95,000 miles should not be priced against 45,000-mile examples. Use the calculator to estimate the mileage gap, then check Auto Trader, dealer listings and trade offers to test whether your expected price is realistic.

Worked Mileage Depreciation Examples

These examples show how mileage changes the value story for private cars, company cars and high-use commercial vehicles.

Example 1 — Family hatchback

A family hatchback is worth £18,000 today. You expect to add 12,000 miles before selling it. At an estimated 16p per mile, mileage-related depreciation is £1,920. That does not mean the car will fall by exactly that amount, because age and market conditions also matter, but it gives a useful resale planning figure.

Example 2 — Sales rep company car

A company car covers 24,000 business miles per year. Compared with a 10,000-mile benchmark, it is adding 14,000 extra miles annually. If the car is worth £28,000 and the per-mile wear assumption is 20p, those excess miles could represent about £2,800 of additional value pressure each year.

Example 3 — Used van

A van purchased for £22,000 is expected to have a useful life of 180,000 miles and a residual value of £4,000. The depreciable amount is £18,000, or 10p per life mile. If it covers 30,000 miles in a delivery year, the usage-based depreciation charge is £3,000 before considering condition and repair history.

Low, Average and High Mileage Guide

Vehicle ageLow mileageNormal mileageHigh mileageWhat buyers usually think
1 yearUnder 6,0007,000–12,00015,000+High miles can remove the “nearly-new” premium quickly.
3 yearsUnder 20,00024,000–36,00045,000+This is a key finance and lease return age, so mileage matters a lot.
5 yearsUnder 35,00040,000–60,00075,000+Service history starts to become as important as the odometer.
8 yearsUnder 55,00060,000–90,000110,000+Condition, repairs and ownership history can outweigh mileage alone.
10 yearsUnder 70,00075,000–110,000130,000+A well-maintained high-mileage car can still be attractive at the right price.

These are practical used-car market ranges, not fixed valuation rules. Always compare live listings and actual trade offers for your exact model, trim and location.

Mileage Depreciation Calculator UK — FAQs

Common questions about vehicle mileage, resale value, business mileage claims and depreciation per mile.

What is mileage depreciation?
Mileage depreciation is the value loss caused by driving a vehicle. It reflects wear and tear, reduced remaining useful life, higher maintenance risk and buyer perception. A car with above-average mileage normally sells for less than the same model with average or low mileage, even if both cars are the same age.
What is a realistic depreciation per mile in the UK?
A practical planning range is around 8p–12p per mile for lower-value city cars, 12p–16p for superminis and family hatchbacks, 15p–22p for SUVs, and 18p–35p for premium cars, luxury cars and heavy-use vans. These are not official rates; they are planning assumptions. The true number depends on model demand, condition, mileage level, service history and live used-car prices.
Is 7,100 miles per year the UK average?
Recent Department for Transport and motoring data points to around 7,100 miles per car per year as a useful average benchmark for England/UK-style planning. Many used-car adverts and finance assumptions still use 10,000 or 12,000 miles as a practical market benchmark, so it is sensible to compare your car against both the statistical average and the advert/finance benchmark.
Can I use this calculator for HMRC mileage claims?
You can use it to understand your real vehicle cost per mile, but you should not treat the result as an automatic HMRC claim. For employees and many mileage reimbursement situations, approved mileage rates apply. For self-employed users, simplified mileage expenses are a separate flat-rate system. If you use actual costs, keep full records and confirm treatment with an accountant.
What are the 2026/27 approved mileage rates for cars and vans?
GOV.UK lists cars and vans at 55p per mile for the first 10,000 business miles in the 2026/27 tax year, then 25p per mile after 10,000 business miles. Earlier tax years from 2011/12 to 2025/26 used 45p for the first 10,000 miles and 25p after that. Always check GOV.UK before filing a claim because rates can change.
Does high mileage always make a car a bad buy?
No. A high-mileage car can be good value if the price already reflects the mileage, the service history is complete and the car has been used mainly on longer motorway journeys. The risk is higher where mileage is combined with poor servicing, short urban trips, accident repairs, missing MOT history or expensive components nearing replacement.
How do lease and PCP excess mileage charges compare?
Lease and PCP excess mileage charges are contract charges, not necessarily exact market depreciation. Some agreements charge 6p–15p per mile, while others charge more for premium vehicles. If your estimated depreciation per mile is higher than the contract charge, paying excess mileage may be cheaper than changing car early. If the charge is higher, staying within the limit becomes more important.
What mileage should I use for total life miles?
For ordinary private cars, 100,000–150,000 miles is a common planning range. For well-maintained diesel cars and commercial vans, higher mileage can be realistic. For taxis, private hire and delivery vehicles, useful life may be driven by maintenance cost, licensing rules and downtime rather than the engine’s theoretical life. Use a conservative figure if the car is older, complex or expensive to repair.
Does an electric car depreciate differently by mileage?
Yes. EV buyers look at mileage, but also battery health, range, charging speed, remaining battery warranty, software support and public charging compatibility. High mileage can matter less if battery health is strong and the car is in demand, but it can matter more if the model has short range, older charging technology or limited warranty remaining.
What records should business drivers keep?
Keep the date, journey purpose, start and end locations, business miles, odometer readings where possible, and vehicle details. For actual cost methods, also keep invoices for fuel, charging, repairs, servicing, insurance, tyres and finance or purchase documents. Good mileage records protect both tax claims and resale value.

Plan mileage before it becomes a surprise cost

Use the calculator before buying, leasing, returning or selling a vehicle. A few thousand miles can change trade-in value, finance equity and business cost planning.

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