About Vehicle Depreciation

Vehicle depreciation is the rate at which your car loses value over time. It's one of the largest costs of vehicle ownership that many people overlook when purchasing.

How Depreciation Works

Most vehicles lose 20-30% of their value in the first year, and around 15-18% per year for the next few years. By year five, many vehicles are worth only about 40% of their original purchase price.

Different Vehicle Types Depreciate Differently

• Luxury cars often depreciate faster due to higher maintenance costs and technology obsolescence.
• Economy cars tend to hold their value better, especially fuel-efficient models.
• Electric vehicles have historically depreciated faster due to battery concerns and rapid technology improvements, though this is changing.

Factors Affecting Depreciation

• Brand reputation and reliability
• Mileage (higher mileage accelerates depreciation)
• Vehicle condition and maintenance history
• Market demand for specific models
• Fuel economy and emissions standards
• Economic conditions and fuel prices