What your car’s resale value looks like after 3, 5, and 10 years
Audio By Carbonatix
I served as a licensed car salesperson for years here in the Midwest. Once you’re done with a vehicle (either mentally, physically, or, let’s be honest, sometimes emotionally), its resale value affects everything from trade-in deals to selling privately.
Many drivers don’t think about these concepts when they’re picking out their favorite shiny color at the dealership, and realize too late that just a short ownership stint can leave you underwater. At best, you’ll find that you’ve spent a lot of your hard-earned cash on something that doesn’t actually love you back.
Don’t get me wrong; I am, after all, a car person. But depreciation cuts deep, so getting informed about your car’s ability to stay afloat in the used market is key.
Let’s break down what your car’s resale value looks like after 3, 5, and 10 years.
Depreciation hits hardest up front
Reportedly, once you wave goodbye to the car dealer, you can also say sayonara to about 10% (or even slightly more) of the vehicle’s value.
After that, according to Kelley Blue Book, a new car loses about 30% of its value in the first 24 months alone.
By the three-year mark, KBB notes that the average vehicle has lost roughly 40% of its original value. This steep drop happens because “brand-new” cars become “used,” and warranty coverage often starts to expire, which can deter some buyers.
For example, a $30,000 car might be worth only around $18,000 after three years.
At 5 years, things level off, but car depreciation continues steadily
Edmunds says the average car has lost 50% to 60% of its original value at this point.
Popular and reliable brands like Toyota, Honda, and Subaru often hold closer to 50% or even slightly more. Clearly, vehicles with a reputation for durability and low maintenance costs tend to retain value better, making them smart choices if resale matters to you.
Looking further out, the 10-year mark is where resale values drop significantly
Most cars will shed 80% to 85% of their original value after a decade, Carfax estimates. That means that if you bought a car, say it was a Hyundai Elantra, for $30,000 in 2015, it might only be worth around $4,500 now.
Factors like mileage, condition, and maintenance history become crucial in determining actual value. Classic or niche models can defy the odds, but generally, 10 years means your car’s value has bottomed out and will continue to decline at a slower rate.
Market trends also play a role
Rising fuel prices tend to increase demand (and, therefore, resale value) for fuel-efficient and hybrid models. Economic shifts and growing interest in EVs are starting to reshape what buyers want, impacting depreciation patterns.
Remember Cash for Clunkers? Those boxy 90s cars are probably worth way, way more today since they’re now classics and harder to find in decent shape. Too bad so many of them were scrapped.
Anyway, to get the best resale value, keep up with regular maintenance, avoid accidents, and hold onto your service records. While depreciation is inevitable, some cars hold their value better than others. Knowing these concepts helps you make smarter choices, whether you’re buying new or planning to sell down the line.
Also, I’ll go ahead and add that after learning about car depreciation, you might just go ahead and opt for a late-model used vehicle to dodge that initial steep drop in resale value.
