Do some cars depreciate less?
Yes. Brands known for reliability (like Toyota or Honda) and certain highly sought-after trucks or sports cars depreciate slower than average.
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Estimate how much a vehicle's value will drop over time to make smarter buying and leasing decisions.
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How car depreciation works
Cars are depreciating assets. A brand new car loses the largest chunk of its value (often 20% or more) in the first year of ownership.
After the first year, most cars lose about 15% of their remaining value each year, reaching roughly 40% of original MSRP by year five.
Vehicles driven significantly more than the national average of 12,000 miles per year experience accelerated value loss, while maintaining clean maintenance records and garaging help preserve market equity.
Year 1 (New): Value - 20% Subsequent Years: Previous Year Value - 15%
Frequently asked questions
How does depreciation affect leasing?
When you lease a car, you are primarily paying for the car's depreciation over the lease term, plus a finance charge (money factor).
How can I minimize vehicle depreciation?
Buying a 2- to 3-year-old certified pre-owned vehicle allows the original buyer to absorb the steep initial depreciation curve, preserving your equity over the ownership lifecycle.