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Depreciation Infographic: How Fast Does My New Car Lose Value?

Edmunds.comEdmunds.com Member, Administrator, Moderator Posts: 10,315
edited May 2017 in Editorial
Depreciation Infographic: How Fast Does My New Car Lose Value?

Edmunds Car Depreciation Infographic shows how fast a new car loses value over a five-year period.

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  • j_thom123j_thom123 Member Posts: 1
    This is great, but considering that the useful life of a vehicle is 8 to 10 years it would make sense to calculate (or at the very least explain how to calculate) the lifetime depreciation of the vehicle.
  • thrstonlovi1thrstonlovi1 Member Posts: 6
    Wow, what a bunch of lies. A new car depreciates 20% the minute you leave the car lot.
  • cdtdotcdtdot Member Posts: 1
    Why is it then that a new Suburban fair price for LTZ is about $56k and a 2008 with 75k miles is $26k trade-in $28 private party. The calculator predicts $20k. That's over a 30% difference. These clearly aren't depreciating as fast as claimed.
  • zimtheinvaderzimtheinvader Member Posts: 580
    cdtdot, not all cars depreciate the exact same amount. Which is why it is smart to consider that in the true cost to own.---------- thrstonlovi1, try it sometime: drive off the lot with a new car and then drive right back on and ask them what they'll give you as a trade on a different car. You can't buy a used car with 1 mile of use on it for that much of a drop but they are going to pay you a lot less than you just paid if you want to sell the car back to them. ----- j_thom123, that's the key (and Clark Howard would agree) keep the new car 10+ years and the depreciation slows to the point you get your money out of it.
  • pstonierpstonier Member Posts: 1
    Include freight charge in starting price?
  • gsemikegsemike Member Posts: 2,282
    I've always found that the depreciation on new cars is overstated. I just did a search for 2010 Base 370Zs on iseecars. $20,600 with 40k on it. That's a far cry from 12 grand
  • steverstever Guest Posts: 52,454
    Retail asking prices are different from trade-in prices. I'd be happy to sell my used cars at dealer retail asking prices all day long. B)
  • patrickwpatrickw Member Posts: 32
    The figure for depreciation after 1 year is correct (cumulative since purchase), but the other figures are incremental, so the captions should be, "Between year n and n+1, your car depreciates an additional..."
  • delsfandelsfan Member Posts: 1
    edited November 2016
    The point is, and the reason we come here, individuals and car dealers are OFTEN asking 20% to 30% more for cars than they are really worth. A 6 year-old car with 87,000 miles that retails for $32,500 new is just not worth $18,500. The used car salesman will tell you Edmunds TMV is way off base - but see how far off base Edmunds is when you go to sell (not trade) your used car. They will be very close. Relating to trades: you hear people say they weren't going to get a new (to them) car, but the dealer gave them $2000 more than their existing car was worth in trade; if I am asking $5K more for my used car than it is worth I can offer an extra $2K for trade-ins all day long.

    You can be assured if you "got" $14,000 for your $12,000 car and the "sales" price for your new car was $30,000 (so in effect you paid $16,000 plus your old car), the dealer put the deal in their books as a $28,000 sale - which in the real world included $16,000 in cash and (the actual value of your old car) $12,000 for your trade-in.
  • eddiedonaldeddiedonald Member Posts: 2
    Found it very interesting
  • boyandboyand Member Posts: 2
    9% of 1st year should be 2688.57 not 2559.00. How was this number of 2559 computed?
  • karhill1karhill1 Member Posts: 165
    Technically what folks are describing is not depreciation. Depreciation is an accounting concept which attempts to spread the cost of an asset less residual value over its useful life. For example a $33,000 vehicle with an expected life of 10 years and a residual value of $3,000, would depreciate $3,000 each year using a straight line depreciation method.

    What is being discussed on this post is cash value. Cash value is different than depreciated value. Cash value is what a person can get if he/she sold the asset. There are many different cash values including trade value, retail sales value, private sale value. Cash value depends on the vehicle, its condition, and the desirability of the vehicle used vehicle market.

    In any case, a person should not view a vehicle as a depreciating asset. Rather, a vehicle is an expense, transportation expense. We all have transportation expenses. Any person's transportation expense includes the cost of a vehicle, interest if financed, repairs, insurance, registration, gasoline. Or, if a person does not have a vehicle, things like bus fair, car rental, etc.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    A true "depreciating asset" seems to me would be something that loses value by just sitting there and doing nothing. If you are using it, then there's value in that.

  • katrina92katrina92 Member Posts: 1
    I'm a math teacher, and I was hoping to use your infographic, but the numbers don't add up. You choose half percentages in your infographic, but count it as whole numbers. :( May I change the numbers in my private slideshow to make the numbers actually work?
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