How Much Can I Expect My New Car to Depreciate?

December 5, 2014

A new car depreciates or loses value almost immediately after you drive it off a dealer's lot. As a quick rule of thumb, a car will lose between 15 and 20% of its value each year according to A car in its 2nd year will be worth 80 to 85% of its 1st year value and a car in its 3rd year will be worth 80 to 85% of its 2nd year value.

Influences on a New Car's Depreciation

The amount that a vehicle depreciates varies depending on the make, model, year, type and other factors associated with the car. If you are looking to retain as much value as you can for your new car, there are some tips that will influence the rate of depreciation for your vehicle.

The Color of your New Car

Believe it or not, the color of the car will influence the rate of depreciation. Cars that have a neutral paint color such as black or silver retain more value than those with more exotic paint colors. This is because neutral colors tend to remain popular in the future, resulting in a higher resale value than those that have been customized to fit the personality of the owner.

Maintenance and Reputation

New cars with low maintenance and a reputation for high quality also have good resale values and lower depreciation rates. Brands such as Toyota and Honda enjoy good maintenance records and have a reputation for being very well built cars.

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