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In the first year alone, a car can lose 20 to 30% of its value. EVs drop even faster. Some lose up to half their value in their initial 12 months of ownership, according to recent data from Wired and Barron’s. So, when should you trade in your car to get the most out of it? Let’s talk timing.

In 2025, the sweet spot to trade in is still around three to four years of ownership and before hitting 70,000 miles.

That’s the window where depreciation slows, but your resale value still holds strong.

Depreciation hits hardest in the first year

According to CarEdge, a new Ford F-150 loses about 32.8% of its value after the first year. By year two, it suffers another 10% drop. After that, depreciation slows considerably: only about a 1.5% dip between years two and three.

EVs depreciate even faster

Wired reports that some EVs lost up to 50% of their value in just one year, thanks to rapid technological change and a flooded used EV market. Barron’s found some one-year-old Tesla Model 3s trading in for $17,000 less than their original price.

Between 3 and 4 years is your trade in sweet spot

Most depreciation happens early, and the curve flattens by year four. This is also when cars start facing maintenance costs like brake services (or even worse, like unexpected system failures). Trading in before that lets you avoid pricey service appointments and further value loss.

Mileage matters just as much as age

Once a car passes 70,000 miles, its value takes another dip. Resale values tend to drop more rapidly once vehicles cross this threshold, as buyers anticipate bigger repairs ahead.

Used car prices are still high in 2025

The Washington Post reports the average used car price now sits at just over $30,000. That’s only about $17,000 less than a new one, which is unusually close. If you’re thinking about trading in, this seller-friendly market could work in your favor.

Timing tip: Do it before January 1, or wait until tax season

Many dealers treat cars as a year older after the calendar flips, regardless of mileage. That can knock hundreds or even thousands off your trade-in value if you wait just a few weeks too long.

Experts still agree that the three-year rule offers the best balance

Buying a vehicle that’s two to three years old and planning to trade in by year five, and before you hit 70k miles, helps you avoid the steepest drops while keeping resale prices attractive. This strategy also saves you the stress of major repairs and warranty expiration.