When it comes to large purchases, we made, buying a car is in the second place according to significance, right after properties. This isn’t surprising due to two reasons. Firstly, purchasing a vehicle can be a large investment, which is why people are careful when it comes to choosing the right moment to make it. Secondly, a car is something that should last you for many years to come. No one wants to purchase the new one every year or so, and also, they don’t want to be forced to pay for extensive repairs every once in a while.

However, there is another thing that can make the whole process of buying a vehicle a bit more complicated. Surely you have heard the sentence, “The moment you take the car off of the dealership lot, it starts losing its value”. This means that cars are depreciation items, meaning that their value reduces over time due to numerous different reasons.
If you are currently looking to sell or even buy a new car, depreciation is something that you have to be familiar with. Due to this reason, in the following article, we are going to introduce you to car depreciation, tell you how it can affect the market, and also give you some tips on how to slow it down when it comes to your own vehicle.

What is the car depreciation?


We have already explained the basics, but now, let’s talk about the numbers. First and foremost, when you drive the vehicle off of the dealership lot, its value lowers anywhere between 10% and 15%. The exact number mainly depends on the brand and model of the vehicle.

Then, by the end of the first year, the value will further reduce for another 10% to 15%. There is another thing that accelerates the process of depreciation. Yes, we are talking about new models that hit the market every few years. It is similar to any other thing – the moment a new car becomes available, the previous model becomes outdated, meaning that its value drastically declines.

What are the important factors?


Let’s start with something obvious – the age of the vehicle. As you can assume, it is quite simple – the older the car is, the lower its value is. This is true for all vehicles, and there isn’t anything one can do to change that. It is what it is.

In addition, there is also the question of the physical appearance of the car and its mileage. No one is willing to pay a significant amount of money for a vehicle with dents and other damages on its frame, right? Don’t forget about the car’s interior and the quality of maintenance. The best way to slow down the depreciation is to regularly maintain every part of the vehicle.

Next, there is the popularity of the brand. Depending on the area where you live, some vehicles are more popular than others. Naturally, if you want to purchase a car of a certain brand that is favored in your state, it will be more expensive. The same thing goes for selling it – you will be able to get more money.

How does depreciation affect the market?


You are probably familiar with the fact that depreciation is quickly rising, which means that it is going to affect the market of used vehicles in a certain way. Due to this fact, the resale value of used vehicles is going to decrease faster, which will encourage people to replace their cars sooner than later. Furthermore, this means that people will likely sell their existing vehicles via websites like This means that the market for used cars is probably going to see a surge in the near future.

Let us elaborate on this. Generally speaking, people usually opt to replace their cars after 5 to 7 years. However, due to the depreciation, i.e., the lower value of used vehicles, people will likely opt for this step after only 3 or 4 years in order to get the best deal.

How can you reduce the depreciation of your car?


Now, we have reached the interesting part, i.e., the things you should do in order to be able to get the maximum value of it.

First of all, if you want to buy a new car, and are already thinking about the future, that is how much you will be able to get for it, there are few things that you should consider. Start with the popular features that people in your area look for. For example, in some regions, vehicles with automatic transmission are more popular than the manual ones, and vice versa. Furthermore, think about the color. As you probably know, the black, white, silver, and red cars are easier to sell than some that are in other vivid colors. Don’t forget to think about the brand. We have already mentioned this, but depending on your state, some companies are simply more favored than others.

Furthermore, you should negotiate the price. This one can quite tricky, which is why you have to make sure not to overpay for your new car. If you do this, you won’t be able to sell it in the future at the price that would be acceptable to you, meaning that you will lose a lot of money.


Moreover, consider getting a fairly new car. What do we mean by this? We have already explained that the biggest value drop occurs in the initial years. When you opt for the one that is past this point, you will significantly minimize the depreciation. It means that you will save a significant amount of money, but that at the same time, you will be able to sell it at a good price in the next few years.

Finally, make sure to maintain it regularly. We are not only talking about cleaning it frequently but also ensuring that every part of it is in the almost perfect condition. This way, you will be able to prevent any damages from happening, which will allow you to maintain a certain value.