Car Depreciation Rates
Average Car Depreciation Rates After One Year
What is the car's value when it leaves the lot? It's something you hear all the time and assume is true to some extent. Is it possible to estimate the average amount? Edmunds' research shows that the average car's depreciation from the moment you drive it off the lot reduces its True Market Value (TMV), to 91%. Wow! This is a one-minute ride that's very expensive.
What is the reason for this? How can a vehicle depreciate so much, so quickly? It all comes down to perception. After the vehicle is driven off the lot, other people no longer see it as a brand new vehicle. It instantly loses 9% on average of its market value. Human beings are not rational in all things. Feelings can be described as feelings. However, some feelings can be more costly than others.
You would assume that the immediate 9% average car depreciation rate should suffice for the first year. Wrong! Wrong! However, mileage is an important factor. The less you have the better. Different makes and models may have drastically different results. This report will focus on the average vehicle.
Average Vehicle Loss after Two Years
Average car depreciation accelerates to 69% by the end of the second year. Year two suffers an additional 12% loss in value. The average vehicle loses 1% every month in year 2. For the right to lose $400 per month, a buyer could be paying $400 per month for a car loan. Automobile experts advise buyers to view vehicles as an investment rather than an asset.
Average automobile depreciation after three years
Our discussion is most relevant to the three-year mark. This is because most vehicle leases end after 36 months or three years. These cars, pickup trucks, and SUVs, as well as minivans, will most likely be available for resale on the used car marketplace within the three-year period. Unfortunately, the news for sellers is not great. A car's average depreciation over three years results in a True Market Value of 58%.
This is just an average. Which models do the worst over three years? This might surprise you. The BMW 5 Series is the car that has the highest depreciation, at 52.6% according to AutoTrader, and closely followed by the Volkswagen Passat, at 50.7%. Other German models include the Mercedes-Benz E-Class (49.9%), and BMW 3 Series (49.5%). American models the Ford Taurus (49.7%), and Chrysler 200 (48.1%) also lose value quickly, losing half of their value within three years.
We won't stop talking about the top ten car-depreciation losers. The Volkswagen Jetta (48.9%) and Audi A3 (48.1%) are two other German models that are among the highest-depreciating. To complete our list of cars worth thinking twice about, we have the American models Cadillac SRX (47.2%) & Buick Enclave (46.6%).
You will notice that there are not any Japanese models in the top ten fastest depreciating cars. Japanese vehicles retain their value much better than American and German cars, thanks to their reputation for reliability. Particularly German cars can be expensive to maintain and repair.
Average Car Depreciation After Four Years
The average vehicle's depreciation rate fell to 49% at the end of four years. This means that after four years, the average vehicle's value has dropped by half. It's a good thing to know. It's amazing to think that the German and American vehicles did the same thing in three years.
Average auto depreciation after five years
Five years later, both literally and metaphorically, the average depreciation of cars dropped to a True market value of 40%. Do you notice a pattern? Each year, the average vehicle's value decreases by 10%. This trend isn't slowing down, people. The average car will be worth almost nothing by the tenth anniversary.
After ten years, the average vehicle can be sold for something. It's not much, and buyers beware.
Cars that depreciate the least
You might be surprised at the cars with the lowest depreciation rates. We are proud to announce that iseecars.com has found that the Jeep Wrangler Unlimited (at 27% after five years) and the Jeep Wrangler Unlimited (at 27% each) are the two best vehicles that depreciate least in 2018. The Jeep Wrangler is a great vehicle! At a staggering 29.5%, the Toyota Tacoma is the only vehicle that can match the Jeep Wrangler.
The following are the top ten best-selling vehicles with the lowest depreciation:
Toyota Tundra 37.1%
Nissan frontier 37.8%
Chevrolet Silverado 1500 39.7%
GMC Sierra 1500 39.9%
Subaru Impreza 42.3%
Ram Ram Pickup Truck 1500 42.7%
How to slow down your car's depreciation rate
You can see that cars quickly depreciate from the moment they are driven off the lot. This can't be stopped, but it can be slowed down. How? Take great care of your car, and be proactive about avoiding abuse and unnecessary use.
Keep track of your scheduled maintenance and service. The manual will tell you what type of service is required (oil changes, brake pads replacements, etc.). Your make/model and the schedule you need. This information can be obtained online or at a dealer. Even if you don't think your car needs it, make sure to get this information from a qualified mechanic. When old parts and dirty fluid are replaced with newer ones, your car's depreciation rate will be lower.
Also, you should be watching out for signs that your car isn't performing or looking as good as it used. You should be able to notice if your car's gas mileage drops, makes unusual sounds, or has any other problems. You will save money and reduce your car's value if you get to the problem quickly. You should also be careful about your car's exterior and interior. To keep your car looking new, wash the exterior and vacuum the interior. You can keep your car looking new and retain its value by giving it a little attention after many years.
The odometer isn't lying. Even if it's in excellent condition, the vehicle will depreciate the more it drives. How can you reduce the miles on your vehicle without it depreciating? Ship your vehicle, instead of driving it.
You can ship your car instead of driving it whenever you need it to travel a distance of a few hundred or more miles. You can transport it safely on a trailer rather than driving in harsh road conditions, which accelerates car depreciation. You can avoid driving for hours, as well as all the hassles and dangers associated with driving.
Move Car Auto Transport Calculator
Our main business is shipping used cars. People who move and take their cars with them. A large number of people buy and sell used cars all over the world. The original auto transport calculator does not require personal information. This helps people determine if the deal is worth it.