13 Factors Sinking Your Car's Value Faster Than You Can Say 'Trade-in'

SAVING & SPENDING - HOME & AUTO
Be aware of these issues that can speed up your car’s depreciation.
Updated May 8, 2024
Fact checked
man inside a car in a showroom

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

Apart from your house, your car is likely your biggest financial investment. However, unlike a home, vehicles start to lose their value almost instantly.

Understanding the factors that cause a car to depreciate might help you preserve some of its value, which can improve your financial fitness.

Here are 13 things that cause your car to lose value over time.

If you’re over 50, take advantage of massive discounts and financial resources

Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.

How to become a member today:

  • Go here, select your free gift, and click “Join Today”
  • Create your account (important!) by answering a few simple questions
  • Start enjoying your discounts and perks!

Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.

Become an AARP member now

Age

Konstantin/Adobe family passenger red Dodge Grand Caravan

The older your car, the lower its resale value. There are exceptions to this rule, such as for classic cars.

But in general, even though a well-maintained older car will retain its value longer, the older the vehicle, the lower the chances you'll resell it at a high price.

Mileage

Songwut Pinyo/Adobe Closeup dashboard of mileage car

The more miles you've driven your car, the more wear and tear it's experienced on the road, which makes it less valuable.

While you can't do anything to decrease mileage, basic maintenance can keep your car in good working order and preserve some of its value for longer.

Accidents

Fxquadro/Adobe car accident on the street

Every accident your car endures decreases its resale value.

No matter how well you repair the car after a crash, the accident will still appear on your vehicle’s history report — and some buyers simply aren’t willing to gamble on a car that has already required several repairs.

Resolve $10,000 or more of your debt

Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.

National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1

How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.

Try it

Condition

เลิศลักษณ์ ทิพชัย/Adobe mechanic checking car engine oil

Do you perform frequent car maintenance, such as changing the oil regularly? If you notice a problem, do you bring it to the shop right away?

Taking care of your car and keeping it in top condition should help it depreciate at a slower rate. You'll almost certainly be able to sell it for more money than if you had failed to keep the car in good condition.

Brand

Mike Mareen/Adobe 2020 Tesla Roadster on the road

Some car brands depreciate faster than others. In particular, luxury brands lose their value relatively quickly.

If you plan to invest in a luxury car, understand that you'll likely recoup less of the cost than if you had purchased a non-luxury vehicle.

Make and model

Tobias Arhelger/Adobe toyota car signs

Some car makes and models are more popular than others, and these beloved cars retain their value better than less popular vehicles.

For instance, a 2024 Ford Bronco has a five-year resale value of 66.7% — which is substantially better than the average resale value of just 42.4% for most cars, according to Kelley Blue Book.

Certain makes of Toyotas, Chevrolets, and some luxury cars, such as BMWs and Porsches, also have above-average resale values.

Climate and weather

scharfsinn86/adobe man sitting at driving seat handling car in extreme blizzard during winter

Where you live and what kind of weather you drive in can impact how quickly your car depreciates.

For instance, if you live in a region with heavy winter storms, you probably drive on salted roads. That salt can wear down your car faster. On the flip side, if you live in a warmer, milder climate, your car might stay in better condition and depreciate at a slower rate.

Interest rates

luismolinero/Adobe pretty girl holding car keys at outdoors with sad expression

Some economic factors outside of your control can impact a car’s resale value. For example, when times are tough, prospective car owners find it harder to afford to buy a vehicle. 

As a result, selling your car could take more time than you had hoped, and you might end up accepting an offer for less than you would during better economic times.

Supply and demand

hedgehog94/Adobe businessman buying used car

Sometimes, the car sales market is flooded with particular car makes and models. Even a well-cared-for vehicle with minimal mileage might go for less because of high supply and low demand.

On the other hand, if you have a car in high demand while supply is low, you could get more for your vehicle than its depreciation rate might suggest.

Earn cash back on everyday purchases with this rare account

Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2

With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!

This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.

Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.

Apply for a Discover Cashback Checking account today

Custom paint jobs

Oleksandr/Adobe car painted with  iridescent color

The more personal detail you add to your car, the harder it might be to sell. In particular, steer clear of custom paint jobs with bright, unorthodox colors.

You might be able to find the one person who loves bright purple with orange highlights as much as you do. However, you will have a much bigger resale audience if your car remains the standard navy, white, black, or red.

Other custom modifications

art_zzz/Adobe ford mustang

Hyper-tinted windows, underglow lights, spoilers, grille inserts, and other aftermarket modifications might increase your own love for a vehicle. But just like custom paint jobs, custom modifications can lower your car’s value once it’s time to sell.

Negative customer perception

Patcharanan/Adobe Frustrated Asian man waits for assistance with broken car engine on street.

Did your current car go through a round of recalls for bad brakes or faulty airbags? The general public’s perception of your car brand or model can impact its eventual resale value.

Even if you have dealt with whatever problem caused the recall, the negative image can stick in people’s minds.

Ride-hailing and renting

Snapic.PhotoProduct/Adobe  car with female passenger

If you rented out your car or used it to earn extra income driving for a ride-hailing company such as Lyft, expect its resale value to decrease.

The car will likely have more wear and tear than if you used it for commuting and travel only, not to mention a higher mileage reading on the odometer.

Bottom line

ViDi Studio/Adobe car client showing thumbs up

You can’t change the fact that your vehicle’s resale value starts to drop the minute you drive it off the car lot.

However, taking good care of your car, going easy on the mileage, and taking other steps can help you get ahead financially by slowing down your car’s depreciation process.

Choice Home Warranty Benefits

  • First month free
  • Protection for unexpected expense
  • 24/7 claims hotline
  • Network of over 15,000 technicians

Author Details

Michelle Smith Michelle Smith has spent a decade writing for and about small businesses. She specializes in all things finance and has written for publications like G2 and SmallBizDaily. When she's not writing for work at her desk, you can usually find her writing for pleasure near large bodies of water.

Want to learn how to make an extra $200?

Get proven ways to earn extra cash from your phone, computer, & more with Extra.

You will receive emails from FinanceBuzz.com. Unsubscribe at any time. Privacy Policy

  • Vetted side hustles
  • Exclusive offers to save money daily
  • Expert tips to help manage and escape debt