Car Depreciation: How Much Is My Car Worth? | LendingTree (2024)

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New cars lose around 20% of their value in the first year, and they’ll be worth about 40% of what you paid after five years. This process is called depreciation.

Depreciation measures how much value your car loses over time due to wear and tear, age and mileage. Here’s everything you need to know to estimate — and protect — your car’s value.

As noted, a brand new car usually drops about 20% in value after one year. And after five years, it will often be worth about 60% less than what you bought it for.

But these numbers are estimates. Several factors determine how much car values fall over time.

How does depreciation work?

Once you buy a car and drive off the lot, depreciation is unavoidable. Your car is only worth what someone is willing to pay for it, and people pay less for used cars than new ones.

Here are the key factors that determine how quickly your car will lose value:

• Model year: People are willing to pay the full manufacturer suggested retail price (MSRP) for a brand new ride, but older cars sell for less. Like all other machines, cars break down over time, and people want reliable transportation with the latest technology.
• Make and model: If you have a popular car, you’re in luck. It’s a matter of simple supply and demand — the more people who want your model of car, the more value it has.
• Mileage and maintenance: Your car’s resale value depends on how well you maintain it and how many miles you rack up. Cars with less mileage and records of regular maintenance will hold their value for longer.
• Accident history: Accident-free cars fetch higher purchase prices at auction because buyers are wary of cars that have had significant damage. While it’s possible to get a used car inspection to make sure it’s in good shape, consumers may choose to pay more for a car with a clean vehicle history report to avoid the hassle.
• Manufacturer reputation: Cars made by manufacturers with a reputation for reliability will have a better resale value.
• Market conditions: Things entirely outside your control — like gas prices, supply chain issues and even global health crises — can influence car values. You can’t change market conditions, but if you’re deciding what car to buy, it’s smart to consider how the market might affect your car’s resale value in the future.

To estimate your car’s value, you’ll need an internet connection and a few minutes to do some digging.

Comparing similar used cars

A basic search for vehicles of the same make, model and year on any used car website will give you a rough estimate of how much your car is worth in the current market. For the most accurate results, look for cars in similar condition with about the same mileage as yours.

This method won’t give you a precise number, but it’s quick. Plus, you won’t have to fill out forms or provide your contact information in exchange for the info you want.

Car depreciation calculators

Another option is to use a free car depreciation calculator from an online appraisal site like Kelley Blue Book or Edmunds. This will give you a customized estimate of how much your car is worth.

You’ll need your car’s vehicle identification number (VIN) in order to get the most accurate appraisal, so check for your VIN on your windshield, under your hood or in the driver’s side door jamb.

Online quotes

You can also get a real quote from a car-buying website like Carvana or CarMax. For this, you’ll fill out a quick online form and answer questions about the car’s features, condition and history.

If you’re looking to sell or trade in your car, online car-buying sites are a convenient option. Just know that you’ll likely get more money for your car by listing your car online and handling the sale yourself.

What are some cars that hold their value?

Cars hold their value when they’re less expensive to maintain and have a reputation for reliability.

In 2024, Kelley Blue Book named Toyota and Lexus as the car brands with the best overall car resale value. Here are their top picks for the least depreciating cars in 2024:

Based on data from Kelley Blue Book

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