Car depreciation | Which cars depreciate the least and the most? (2024)

When it comes to cars,Depreciation explains how much the car's value has fallen over time. It's the difference between what you paid for the vehicle and its current value. Cars will fall for many reasons includinghow many kilometresyou drove and how well you maintained it.

With car insurance, depreciation can affect how much you get reimbursed when youfile a claim.

Vehicles fall due to many factors. Some cars retain their value better, such aspick-up trucks,SUV'sand sports cars.Electric vehiclesand luxury sedans are reportedly losing value faster. Some of the top cars with the lowest depreciation are Toyotas and Jeeps over BMW cars, which take three of the top ten spots for the highest rate. Here are a few more reasons why it will fall:

• The more kilometers a vehicle has, the higher the depreciation.
• If a car is 'like new', it retains its value for longer. The more scratches and damage, the lower the value.
• Cars with betterfuel efficientis depreciated more slowly.
• If your vehicle has a high safety and reliability rating, it will retain its value.
• Technology such as Bluetooth, wireless charging and remote starting are becoming increasingly popular and even standard in most cars. If yours doesn't have it, it could lower the value.New car safety featuresis also a bonus.

Insurance companies calculate the true cash value of a vehicle by taking into account its age, mileage, make and model, fuel economy and wear and tear. Older vehicles lose their value over time as new models are introduced to the market.

The value of a car decreases with the number of kilometers it has been driven. Cars with a better reputation and better fuel economy retain their value better. Cars known as "gas guzzlers" depreciate more quickly. Wear and tear also reduces the value of a vehicle.

Although the largest amount occurs when driving from the ground,some cars can lose 20% of their original value within the first year. After the fifth year it could have lost up to 60% of its original value.

All vehicles depreciate at different rates, so exact depreciation varies significantly from vehicle to vehicle.Research shows that the number of new cars falls by 20-30% every year.

However, to get a rough estimate, you can look up the current market value of your car and subtract it from the purchase price. Don't forget to leave out any taxes or fees you paid.

If you're considering buying a car, look up the fair market value of older versions of the make and model to get an idea of ​​the car's value in the future. It's important to remember that every vehicle has a different depreciation rate.

Here is an example of a calculation that can help you estimate how much your new car will depreciate annually:

• After year one = Purchase price x 0.20%
• After year two = year one value x 0.10%
• After year three = year two value x 0.10%

Based onOMNICalculator: If you spend $32,000 on a brand new vehicle, depreciation would reduce the value to approximately $25,920 after one year, $22,080 after two years, and $18,560 after three years. It's important to remember that every vehicle has a different depreciation rate when calculating yours.