When shopping around for a new car or purchasing a used one, it is crucial that you’re aware of how cars lose their value and what, exactly, that means for you.
Depreciation is the process in which cars lose their value over time, due to mechanical wear and tear, dents, dings, etc. According to a study conducted by iSeeCars in 2020, the average depreciation of a brand new car after its first five years is about 49.1%.
Now, while that may seem like an incredible loss, it isn’t a figure that’s set-in-stone: Car depreciation rate is affected by the vehicle’s make, model, upkeep costs, popularity, and other external factors.
Reasons for Depreciation
Age
Unlike a good bottle of wine, cars do not get better with age. As time marches forward, the value of the vehicle will drop.
Condition
Well-kept vehicles will retain a higher value over time. If your car has only been subject to the standard dents and dings of use and not suffered any large amounts of damage, it’s value will be higher than if the car has been in a significant accident.
Make & Model
Demand is one of the fundamental driving factors of economics. The more popular a car is, the higher its value will remain. The opposite is, of course, also true.
Mileage
As the miles on a car’s odometer increase, its value decreases. The higher the mileage on a car, the higher the typical cost of upkeep is and a shorter remaining lifespan for the vehicle.
Ownership History
A car with a single owner over the course of its lifetime will retain a higher value (as long as it is well maintained) than a car that has been passed around to several different owners.
Color
Cars with neutral paint colors undergo less depreciation than cars with more eccentric colored vehicles. This is because neutral colors (like Black) will always be “in style.”
Gas Prices
Surprise! The price of a gallon of gas as well as the miles per gallon can impact how quickly a car depreciates. Gas guzzlers will suffer this depreciation the hardest, while more fuel efficient models will feel the impact the least.
Reputation
Vehicles with a reputation for longevity over time also depreciate less than vehicles without such a reputation.
How Quickly Does Depreciation Occur?
As stated in “Which Car Brands Retain the Most Value Over Time,” new cars will depreciate an average of 60% of their value by their fifth year of ownership. After the tenth year, however, the depreciation plateaus.
Decreasing DepreciationWith depreciation seemingly inevitable, there are a few things you can do to lessen its impact:
- Keep the Miles Low
- Stay On Top of the Maintenance
- Keep Maintenance Records
- Keep the Interior Neat
- Keep the Exterior in Great Condition
Car-Worth & Depreciating Vehicles
While the depreciation of a vehicle can make it difficult to get your old car off your hands, Car-Worth is here to make things a little easier.
A quick visit to Car-Worth.com gives you the opportunity to get a quote for your vehicle within 90 seconds. Answer a few basic questions about your vehicle’s history (or “take the fast lane” by inputting its VIN) and receive a quote from one of our associates quickly!
Once you find the quote satisfactory, a pick-up for the vehicle can be scheduled within 24-48 hours. Don’t worry about paying for the tow, because we handle that! On top of that, we handle the cost of any title change as well. All you have to worry about is saying goodbye to an old car and making friends with some new money in your hand!
How Much Does Age Depreciate A Car?
After the first year, your car depreciates by 20% to 30%. The years that follow that typically see a 15% to 18% depreciation annually. On average, your car loses 60% of its initial value by the fifth year of ownership.
Car-Worth can get you quoted with the value of your vehicle, regardless of age. Once you accept the quote, a free tow can be arranged. We take the car, you take the cash!
Does The Age Of The Car Affect Its Value?
Age and Mileage are the two biggest factors in affecting your car’s depreciation. New models are released annually, immediately devaluing “older” models.
It’s a Quick and Easy Process
Tell us About Your Vehicle
Answer a few quick questions and provide a picture if you can.
Offer
In less than two minutes, you’ll have a guaranteed offer.
Get Your Offer
In less than two minutes, you’ll have a guaranteed offer.
Get Paid
Within 24-48 hours, we will tow your car for FREE and pay you on the spot!
