Car Depreciation: How It Works and Ways to Limit It

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Most consumers have heard of the idea of car depreciation. Some may not know much about it, though. Since all cars are subject to it, it’s helpful to know some of the details.

If you’re looking for used cars, American Fork, Utah residents, you can find some great ones near you. Before you start hunting for the one that best fits your needs, though, let’s briefly discuss depreciation and how you can avoid it once you’ve purchased your vehicle.

What Exactly is Depreciation?

Depreciation means that your car becomes less valuable as time goes on. Unfortunately, this process starts as soon as you buy a vehicle and drive it home. 

Depreciation happens with new cars and with used ones as well. Perhaps the most dramatic depreciation occurs if you buy a brand-new car. Completing the paperwork, taking ownership of the vehicle, and starting to drive it can cause the value of the car to dip by as much as 9-11%, on average.


You can also expect the value of your car to depreciate by about 40% of the original value within the first five years you have it. This will be true even if you’re a very careful driver and you don’t get in any wrecks. 

Why Does a Car’s Value Depreciate?

To some degree, you can look at a car as an investment. You buy it, and it costs a certain amount of money. It will retain some of that value, but it’s not the same as buying a piece of sports memorabilia, for instance, and keeping it behind glass somewhere in your house. 

The reasons why cars depreciate are twofold. The first reason is because, presumably, you’re driving the vehicle often. Even very safe drivers will subject a car to natural wear and tear.

The other reason is because a car probably has all of the latest technology if you buy a brand-new one. The longer you have it, the more outdated the tech becomes. That’s just the nature of cars, and there’s nothing you can do about it.  

Steps You Can Take to Prevent a Vehicle’s Fast Depreciation

This might sound a little depressing, but a car’s depreciation is not the end of the world. There’s no reason you can’t expect to get a substantial amount of money when you decide to sell your vehicle, even if it’s not worth as much as it once was.

To slow a car’s depreciation, the best thing you can do is to drive it as little as possible. The more miles you put on a vehicle, the faster its depreciation rate.

That means you should work from home if you can since the daily commute will put more miles on your car. The other thing you can do is to drive as safely as possible to avoid any collisions. 

Your car’s value takes a hit each time you’re in an accident, even if you get it fixed afterward. 

Keeping these factors in mind will help you retain your car’s value. 




Homeschooled 15 year old from LA. I thrive to push the boundaries of fashion and society's rules for youth. I like chai lattes and shopping and am currently deciding which of 100 careers to pursue.

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