Used Car Depreciation: Which Cars Hold Value and Which Don't

Depreciation is the biggest cost of owning most cars, bigger than fuel or repairs for many owners. It is also the reason used cars can be such good value. If you understand which cars lose value quickly and which hold it, you can pick a car that is cheap to buy, cheap to own, or both.

The short answer: A typical car loses roughly 40% to 45% of its value in five years, and about 20% in the first year alone. Trucks, hybrids and certain sports cars hold value best. Electric cars, large luxury SUVs and executive sedans lose value fastest. Buying a car after its steepest drop is the most reliable way to save.

Key takeaways

• iSeeCars' 2026 study of 950,000+ five-year-old cars found an average five-year loss of 41.8% of the original price, down from 45.6% a year earlier.
• Trucks (34.2%) and hybrids (35.4%) lost the least on average over five years, while EVs lost the most at 57.2%.
• Kelley Blue Book says new cars often lose 20% or more of their value in the first year.
• A fast-depreciating model is usually a better deal to buy used, while a slow-depreciating model is usually cheaper to own if you plan to sell later.
• Mileage, condition, service records, color and trim all shift a specific car's value within its model's general curve.

How much does a car depreciate per year?

Most cars lose the largest chunk of value in year one and then depreciate more slowly. Kelley Blue Book says new cars often lose 20% or more in the first year, and its guidance puts five-year losses at around half or more of the original price for many vehicles.

The iSeeCars depreciation study gives a more current market read. Analyzing over 950,000 five-year-old cars sold from March 2025 to February 2026, it found an average loss of 41.8% of the original sticker price after five years. That was an improvement from 45.6% the year before, reflecting firm used car prices.

AAA's Your Driving Costs study estimated depreciation on an average new vehicle at about $4,334 per year over five years and 75,000 miles, making it the single largest ownership cost.

Which types of cars hold their value best?

Trucks and hybrids hold their value best as groups. In the 2026 iSeeCars study, trucks lost an average of 34.2% over five years and hybrids lost 35.4%, both well below the 41.8% average. Small SUVs were close to average, while larger SUVs and EVs lost more.

Trucks and hybrids share a few traits that support resale value. Demand from used buyers is strong, the vehicles have a reputation for lasting a long time, and the hybrid appeal grows when fuel prices rise.

Which specific models hold value best and worst?

The models that held value best in the 2026 iSeeCars study were enthusiast sports cars and Toyota trucks. The ones that lost the most were EVs and large luxury vehicles.

Mainstream models with strong reputations, such as the Honda Civic and Toyota RAV4, also tend to retain value well. Luxury cars lose value fast mostly because their high original prices and expensive out-of-warranty repairs scare off used buyers.

Why do some cars depreciate faster than others?

A car depreciates faster when used buyers want it less than new buyers did. Several factors drive that gap:

1. Repair cost reputation. Cars known for expensive out-of-warranty repairs, such as many large luxury models, lose value quickly.
2. Technology aging. EVs lose value fast partly because newer models offer more range and features, and partly because of worries about battery health.
3. Incentives on new models. Big discounts or rebates on new cars push used prices down.
4. Supply. Models sold in large numbers to rental fleets or lessees can flood the used market.
5. Reliability and longevity. Models known to run a long time, like many Toyota and Honda vehicles, keep strong demand.

KBB also lists make, model, age, mileage and condition as the main drivers. Market conditions matter too: low inventory raises used prices, while high rates or fuel prices can soften demand.

Should you buy a car that depreciates fast or slow?

Buy a fast-depreciating car if you want the lowest purchase price and plan to keep it a long time. Buy a slow-depreciating car if you may sell or trade in within a few years. The right answer depends on how long you will own it.

A luxury sedan that lost 60% of its value can be a lot of car for the money. Just set aside money for repairs, because the reasons it depreciated (expensive parts and labor) still apply to you as the next owner. Check our list of cars to avoid buying used before you go that route.

How old should a used car be to avoid the worst depreciation?

A car that is two to four years old has usually taken its steepest losses while still having modern features and, often, some remaining factory warranty. KBB recommends looking at cars from the current or previous model year to capture much of the first-year drop while keeping warranty coverage.

Older cars depreciate more slowly in dollar terms, so a ten-year-old car may lose little value while you own it. The tradeoff is higher repair risk. Our guide on how old a used car should be compares the age brackets, and how many miles is too many covers the mileage side.

How can you protect your car's resale value?

You protect resale value by keeping the car in the condition used buyers pay for. KBB points to regular maintenance with records, avoiding heavy aftermarket modifications, and keeping mileage reasonable.

• Keep every service receipt in one folder or a digital file.
• Fix small cosmetic damage before selling.
• Avoid modifications that narrow the pool of buyers.
• Pick popular colors and trims when you buy.
• Sell privately when you have time, since private sales typically return more than a trade-in. See trade-in vs. selling privately.

Let the right car come to you

Fast-depreciating cars often turn up at attractive prices, and those prices keep falling while the car sits. Scout lets you describe the car you want, checks dealer inventory near you and emails you matches. Scout Pro adds price-drop alerts when a dealer cuts the price on a car Scout sent you.

Frequently asked questions

What car brand holds its value best?

In the 2026 iSeeCars study, Porsche, Chevrolet's Corvette and Toyota's trucks led the list of slowest-depreciating models. Among mainstream brands, Toyota and Honda models commonly rank well because of their reliability reputations. Brand averages hide model differences, so check the specific model and year you are considering.

Do electric cars lose value faster?

Yes, as a group. iSeeCars found five-year-old EVs lost an average of 57.2% of their original price in its 2026 study, compared with 41.8% for all vehicles. Rapid technology change, battery concerns and the end of the federal used EV credit all play a role. That steep drop can make a used EV cheap to buy.

Does mileage or age affect depreciation more?

Both matter, and they interact. A car's age sets the general value curve for its model, while mileage moves a specific car above or below that curve. A five-year-old car with 30,000 miles is typically worth noticeably more than the same car with 90,000 miles. Condition and service records also shift value.

How do I check a used car's current value?

Use valuation tools such as Kelley Blue Book, Edmunds or J.D. Power with the exact year, trim, mileage, options and ZIP code. Then compare real dealer listings for similar cars within your search area. Listing prices show what sellers ask, while valuation tools estimate what cars actually sell for.

Do hybrids hold their value?

Hybrids held value well in the 2026 iSeeCars study, losing an average of 35.4% over five years versus 41.8% for all vehicles. Strong fuel economy and reliable reputations for models like the Toyota RAV4 Hybrid and Prius keep demand high. Battery condition still matters, so check service history on older hybrids.