Car depreciation, which describes the decrease of value over time, directly influences your car’s current market worth.

Essentially, car depreciation is the disparity between your car’s initial value and its current retail value.  While traditionally, new cars lose value upon leaving the dealership, some used cars retained or even increased in value due to shortages in 2021.

However, typical depreciation resumed in the used car market by the latter half of 2023 due to factors like increased new car sales and economic challenges.

Since depreciation rates vary annually, monitoring your car’s value over time can help determine the optimal time for selling it.

What factors contribute to car depreciation?

It suggests that for every 20,000 miles added, around 20% in depreciation in value can be expected due to perceived wear-and-tear, with even higher rates for older vehicles.

It also mentions that lower mileage cars may still have manufacturer warranty, providing added value.

However, for vintage or classic cars, high mileage may not necessarily lower their value, as they are often desired for their historical significance and condition.