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Depreciation: Why it matters

Depreciation: Why it matters

One of the biggest expenses related to your used car isn’t something that comes directly out of your wallet. It only shows up when you sell your car.

It’s called depreciation, and if you’re not paying attention to it before deciding which vehicle to buy, you’re making a big mistake.


Depreciation is the difference between what you pay for a car and what you will sell it for in a few years.

Every car will lose value over time as it ages and racks up more mileage, but some cars drop in value much faster than others. That’s why you should factor in the depreciation of a vehicle before you decide to buy it.


Calculating depreciation isn’t something that can be guessed perfectly. For example, if gas prices skyrocket next year, that’s going to cause big trucks and SUVs to lose their value faster. And if gas prices go lower, cheap economy cars may lose their value more quickly.

The truth is that no one has a crystal ball that shows the precise future price of cars, but based on historical pricing, you can see which vehicles maintain their value and which ones don’t.

Look for which brands and vehicles tend to hold their value the best over time. You can search online for “car depreciation calculator” to get some estimates of which vehicles are predicted to be worth the most when it comes time for you to sell.


As a general rule, one of the fastest ways to decrease the value of a car is to modify it from its factory condition. No matter how hot body kits, engine modifications and flashy wheels may look to you, they’re quite likely to not match the taste of buyers in the future.

So if you want to keep depreciation to a minimum, maintain your car according to the recommended schedule, keep detailed maintenance records, and don’t spend money on modifications that will reduce buyer interest in the future.