Car depreciation is the single largest ownership cost for most drivers—but what exactly is it, and why does it happen? Simply put, depreciation is the loss in a vehicle’s market value over time. Understanding the mechanics behind depreciation helps you make smarter buying, selling, and trade‑in decisions.
1. What Is Depreciation?
Depreciation measures how much value your car loses from the moment you drive off the lot to the day you sell or trade it in. Every vehicle begins to depreciate the second it's titled, and while all cars lose value, the rate varies widely by make, model, and market conditions.
2. Key Factors Driving Depreciation
Several interrelated factors determine how quickly—and how much—a car depreciates:
- Age & Mileage: Newer cars with lower mileage maintain more of their value. Exceeding average annual mileage (12,000–15,000 miles) accelerates wear and tear.
- Make & Model Reputation: Vehicles with proven reliability (like many Subaru models) tend to depreciate more slowly.
- Condition & Maintenance: Regular servicing, a clean interior/exterior, and timely repairs preserve value.
- Market Demand: Trends—such as rising fuel prices—can boost fuel‑efficient models. Seasonal demand also plays a role.
- New Model Cycles: When a next‑generation redesign arrives, outgoing models often take a sharper value drop.
3. Depreciation Over Time: The Typical Curve
On average, a new car loses about 20–30% of its value in the first year, and around 50–60% by year five. Luxury and specialty models may depreciate faster, while brands known for longevity—like Subaru—often hold their value remarkably well.
4. Minimizing Depreciation: Actionable Tips
Although depreciation is inevitable, you can take steps to slow it:
- Choose Wisely: Research resale values on sites like Kelley Blue Book and Edmunds. Opt for models with strong historical resale.
- Maintain Meticulously: Follow factory‑recommended service intervals, keep records, and address issues promptly.
- Protect the Exterior: Invest in paint protection film or ceramic coating and park in shaded areas to avoid sun damage.
- Limit Mileage: Carpool, use public transit, or plan trips strategically to stay under average mileage benchmarks.
- Stay Informed: Trade in before a major redesign or when your model’s demand is peaking.
5. Calculating Your Car’s Current Value
Use reputable online tools and local dealer appraisals in tandem. Be honest about your vehicle’s condition. Combine a clean appraisal with a well‑documented maintenance history to negotiate the strongest offer.
Your Trade-In Experience with subaru.fmycar.com
At subaru.fmycar.com, we make the depreciation and trade-in process transparent and fair. Our experts, led by Jared Casper, leverage real‑time market data and in‑depth inspections to deliver accurate valuations. There’s no pressure—just clear information so you can decide what’s best for your next automotive move.
- Fair Appraisals: Offers based on current local demand and condition.
- Complete Transparency: We explain every deduction and adjustment.
- Flexible Options: Apply your value toward a new Subaru, a certified pre‑owned model, or take cash.