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What Factors Affect Vehicle Depreciation?

Anna T.
By
Updated May 23, 2024
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There are many different things that can affect vehicle depreciation. Some things that have an effect on how fast a vehicle depreciates are the current state of the economy and the type of car. Additionally, vehicles that have been involved in accidents, regardless of make or model, tend to have less value than those that have not. Many people say that a vehicle loses lots of value as soon as it is driven off the lot, and this is typically true for the majority of vehicles. Every mile that is added to the odometer usually takes a little bit of value away from a car.

The economy can affect vehicle depreciation either positively or negatively. A good example of this may be gas prices, which tend to fluctuate depending on the economic state of a given country. When gas prices are high, vehicles that have low gas mileage tend to depreciate faster because consumer demand for them goes down. SUVs (sport utility vehicles) are automobiles that usually get very few miles per gallon of gas. When gas prices are on the lower end, vehicles like SUVs tend to start depreciating slowly because consumer demand for them goes up.

Another thing that affects vehicle depreciation is the make and model of a particular car. If a certain brand of car has a long history of reliability, it will usually depreciate more slowly than cars with histories of multiple repairs or recalls. Cars that score well in crash tests may also depreciate more slowly than cars that score poorly. If a certain car is known for being reliable, it is likely that there will be a high consumer demand for it even after it is three or four years old. This means that car dealerships can often keep these cars for sale at profitable prices for quite a while after their initial release.

Regardless of the type or reliability of a certain vehicle, an accident is most likely going to negatively impact vehicle depreciation. Even if a certain car was involved only in a minor fender bender that was easily repaired, it could still make the car worth much less than it would be compared to identical cars in similar condition that were never involved in an accident. This is why it is important for a person buying a used car to ask about the history of the vehicle. If someone wants to buy a car to fix up and then resell for more than what was paid, a previous accident on the history of the car could make this difficult.

WikiMotors is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Anna T.
By Anna T.
Anna Thurman is a skilled writer who lends her talents to WikiMotors. Her ability to research and present information in an engaging and accessible manner allows her to create content that resonates with readers across a wide range of subjects.
Discussion Comments
By anon124555 — On Nov 06, 2010

I just learned the hard way. I have a 2009 Honda Civic LX-S with only 6,700 miles on it. Last January, just 10 days after I bought it, a young guy pulled out in front of me and caused about $5800 damage to front bumper and caused driver air bag and side curtain to deploy.

Now I'm trying to trade the car and am told it is "damaged goods" and dealers only want to give me $11,500 for this vehicle due to a negative CARFAX report. If CARFAX is going to keep data it should at least say extent and that car was repaired at HONDA so people won't speculate it was more than it was.

I can't do anything now but keep paying this car off or try and private sell and just show people the accident photos with my paid receipt for repairs -- hoping that being honest is best. Car still has over two years left on the Honda warranty. It's a heartbreaker given I have no recourse in this state and this kid was at fault.

I never had one traffic violation in 44 years of driving.

Anna T.
Anna T.
Anna Thurman is a skilled writer who lends her talents to WikiMotors. Her ability to research and present information in an engaging and accessible manner allows her to create content that resonates with readers across a wide range of subjects.
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