How much does a car depreciate?

Question

Accepted Answer

Depreciation isn't a straight line — new cars lose value fastest in the first year, then the rate of loss gradually slows down as the car gets older.

The general shape of the curve:

The moment it's first driven away — a new car typically loses a noticeable chunk of its value the instant it becomes "used" rather than "new," regardless of mileage, simply because it can no longer be sold as brand new
Year one — often the steepest period of depreciation, commonly somewhere in the region of 15-35% of the original value, though this varies significantly by make, model, and demand
Years two to three — depreciation continues but at a noticeably slower pace than year one
Beyond three to five years — the curve typically flattens out considerably, with older cars losing value more gradually and sometimes levelling off almost entirely once they reach a certain age and price point

Why the rate varies so much between cars:

Some models hold value far better than others, driven by factors like reliability reputation, ongoing demand, running costs, and how many were originally sold (rarer models often depreciate more slowly than mass-produced ones). This is why two cars bought new for a similar price can be worth very different amounts a few years later — brand and model choice has a real, lasting effect on how much of your money you get back at resale.