How Much Does a Used Car Depreciate in Value?
We know that when you choose to sell your vehicle, you want to get the best price possible and that is where The Car Depot comes in. When many car owners decide to sell and estimate the value of their car, truck or SUV, they forget to account for depreciation and a common question we get at The Car Depot is – how much does a used car depreciate in value? Find out how much vehicles depreciate in value over time and how much you can expect for your used car with a quick overview created by The Car Depot in Birmingham, AL.
How Much Value Does a New Car Lose?
When you purchase a brand-new car, truck or SUV, it is important to understand how depreciation works. This can be a key factor when you decide you want to sell your vehicle down the road. Depreciation is the difference between what you paid for your car, truck or SUV and what it is worth when you sell it used.
Within the first year, a vehicle will depreciate by 15% to 20% – and will depreciate by about 15% each year after that. With that rate of depreciation, a vehicle may be worth 40% of its original price when it hits the five year mark. Vehicle depreciation rates vary by make and model with vehicles like the Jeep Wrangler and Toyota Tacoma depreciating at a slower rate.
Why Do Cars Depreciate in Value?
The primary reason that cars, trucks and SUVs depreciate is standard wear and tear. The moment you drive it off the lot, there is a greater risk of damage – which leads to depreciation. Here is a look at the primary reasons why vehicles lose value over time.
- Style – The type of vehicle you own plays a role in deprecation. Trucks and SUVs are in higher demand in our current market and will retain value better than sedans.
- Make and Model – Select brands like Toyota, Jeep and Porsche retain value better than competitors and specific models follow suit.
- Vehicle Age – In an industry where a new model arrives each year, the older a vehicle is, the lower its value will be when you decide to sell.
- Vehicle Mileage – The more miles you have on your odometer, the more repairs it may need and that is reflected by lower values.
- Vehicle Condition – A vehicle with standard wear and tear provides more value than a vehicle that has been neglected.
- Brand Reputation – A few automotive brands have a reputation for frequent and costly repairs, which can be reflected by its value and depreciation.
READ MORE: Which Cars, Trucks and SUVs Have the Best Resale Value?
Are you ready to sell your car? Are you confused about how depreciation works in the automotive world? You may have asked – how much does a used car depreciate in value? Learn more with this quick breakdown provided by The Car Depot and get the best price for your used car in Birmingham, AL!