A used-car lot with an advertisement on a car tipped vertically.

Car Depreciation: What You Should Know

Car depreciation is a costly part of vehicle ownership that’s often left out of the conversation when discussing a potential purchase. You may already know that a car or truck’s value typically decreases over time, but do you know why?

Certain key factors play into depreciation, and there are certain types of vehicles, driving styles, modifications, and maintenance issues that have an outsize impact on depreciation overall. Here’s what you should keep in mind to get as high a resale value as possible.

Market Value

One of the biggest factors affecting car depreciation is the market for a particular model. How desirable a vehicle is to buyers, as well as how rare it is, can have a significant effect on its value.

For example, luxury cars tend to suffer from high levels of depreciation, because most customers in the luxury market are buying new, often for the prestige associated with the cost of the badge. This pushes down the value of used luxury vehicles.

carOn the other end of the spectrum, however, are ultra-high-end sports cars. So few are built, and demand is so high, that their values remain much more stable, despite their association with the luxury segment. Still, even more affordable vehicles suffer from accelerated depreciation when they’re driven off the dealer lot.

How does the market affect standard cars and trucks? Supply and demand plays a big role: When the next model year comes along, it may bring with it different features or styling that push the previous model’s value up or down.

With exceptions made for unique automobiles, there will always be more used cars and trucks out there than new ones, and when a vehicle is more available on the market, its price is typically lower. If a vehicle has a reputation for poor reliability or for using more gas than its competitors, then that can also accelerate and exacerbate depreciation.

Condition Counts

There’s not much you can do about car depreciation related to the whims of the market. You can, however, carefully investigate the values of similar used vehicles within a five-year window leading up to the car you’re buying to get an idea of what you’re in for.

What you can definitely control is keeping your automobile properly maintained and in excellent condition to help it keep as much of its value as possible. A car that has full service records, including a history of oil changes, tire rotations and minor repairs, is almost always worth more than one with a completely undocumented provenance.

While you can only do so much about car depreciation in the market, it’s important to remember that used-car buyers will gravitate toward a vehicle with no mysteries lurking in its past. Keeping fastidious maintenance records will help you get your asking price as close to market value as possible when it comes time to sell.

Check out all the maintenance parts available on NAPA Online or trust one of our 16,000 NAPA AutoCare locations for routine maintenance and repairs. For more information on car depreciation, chat with a knowledgeable expert at your local NAPA AUTO PARTS store.

Photo courtesy of Flickr.

about author

Benjamin Hunting

Having been bitten by the car bug at a young age, I spent my formative years surrounded by Studebakers at car shows across Quebec and the northeastern United States. Over ten years of racing, restoring, and obsessing over automobiles lead me to balance science writing and automotive journalism full time.  I currently contribute as an editor to several online and print automotive publications, and I also write and consult for the pharmaceutical and medical device industry.

related articles

LEAVE A REPLY

Your email address will not be published. Required fields are marked *