What You Should Know About Car Depreciation

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Did you know that the moment you drive your brand-new car out of the dealership, its market value has already dropped significantly?

I bet you know that already.

But do you know what causes your car to depreciate? A car’s depreciation is unavoidable, but you can slow down your car’s depreciation rate. There are several ways to keep your car’s market value high. Here are some facts on how your vehicle loses its value and how to lessen or avoid them.

What is Car Depreciation?

Depreciation was the difference between the price when you bought your car and the price when you sell it. When you purchase your vehicle, you are paying for its retail price. The moment you drive it, its price has already dropped. It already depreciated even though you had it for just a few minutes.

What Causes a Car to Depreciate?

Many factors contribute to causing a car to depreciate. Here we’ll explore what makes a car depreciate.


The mileage on a car can tell its condition. A car with high mileage has more wear and tear to them. The more you drive your car, the more its price will drop.

Fuel Efficiency

With the steady and unending increase in gasoline prices, people opt for more fuel-efficient diesel cars than petrol or gasoline-powered ones. On average, a gas engine can run 9KM/L, and a diesel engine can run 12KM/L.


Car models go through “face-lifts” or generation changes every few years. The newer your car model is, the higher you can sell it. If you plan to sell your car after several face-lifts, the more it will depreciate.


Any damage or repair history on your car could affect its selling value. If your car underwent some significant repairs, especially in the engine, it could significantly reduce its selling price.


If you follow your car’s preventive maintenance schedule (PMS) regularly, then you could sell it at a higher price. Cars maintained in its dealership or what we usually call “Casa maintained” would have a higher value than repair centers.

We all know it is expensive to maintain vehicles in a casa, but there is a good reason. Dealership mechanics are trained and equipped to keep your car properly. You can be sure that the parts they are using are genuine. You cannot miss doing maintenance since it will cost you more if your car breaks down. Some people simply get a low interest cash loan from licensed lenders like Toa Payoh money lender to pay for the fees. Just make sure to read a money lender Singapore review to know where to find the best loan offers.


Another advantage in keeping your car in your casa’s care is the warranty. If you take your car to a third-party repair or service center, you’ll void your car or dealership’s warranty. If your car’s warranty is still intact, you could sell your car for a higher price.


Brands can also affect a car’s depreciation. There are more favored brands here in the Philippines because of their reputation and reliability. If you want a more depreciation-proof car, choose brands with a good reputation.

How Quickly Do Cars Drop in Value?

Now that we know what makes a car depreciate, the question now is how fast?

One Minute

The moment you drive your car out of the dealership, it has already depreciated. It is price already dropped by 10%

One Year

After a year, your car will have its steepest price drop. It would have dropped 20% less than you first bought it.

Five Years

Every year after the first, your car continues to depreciate up to the fifth year. Your car will lose almost 60% of its initial value when it hits the 5-year mark.

How to Reduce Your Car’s Rate of Depreciation

Here we will dive down on how to reduce your car’s depreciation. By the time you sell it, you could sell it at its highest price possible. The two most significant factors affect your car’s depreciation, mileage, and age.

Here are some useful tips to keep your car’s price up.

Keep your car’s mileage down!

Are you planning on going on a long road trip? You might want to rethink that you want to keep your car’s value up. Constant wear and tear on your car will decrease its overall value. The more you drive your car, the more you will have to pay for fixes and maintenance.

Regular Maintenance

If you use your car for business or work and cannot avoid driving a lot, my next tip is to don’t miss your preventive maintenance schedule. Keeping your car in tip-top shape will save you from unexpected repairs and hassle. Keep your maintenance records to prove that your car is well maintained.

Aside from the regular tune-ups and oil changes, check your car’s battery, transmission fluid, brake fluid, and tire threads.

Also, take care of your car’s other systems and components like air conditioning and interiors.
We all know how scorching hot summer here in the Philippines is. So, a functioning AC system will bump your selling prices.

Avoid staining or scratching your car’s interior. A possible buyer will indeed inspect every nook and cranny. They will look for anything that they could use to haggle prices.

Avoid Modifications

Body modifications like spoilers, skirts, and wheel sizes can reduce your car’s market value. Mods will also limit buyers interested in buying your car.


Painting your car outrageous colors will turn off potential buyers. Stick to more popular colors like black, silver, and white.

Drive Safely

Driving safely will minimize your chances of having an accident. If your car had some major repairs, it could significantly affect your car’s value.

Have Your Own Garage

Having a garage will protect your car from the elements. Constant exposure to the sun’s heat or rain will damage your car’s paint job over time. A garage will also protect the car from vandals. Imagine kids scribbling on your dusty car parked on the road.


Deep scratches can lead to rust in your car’s body. Corrosion and body damage due to rust will significantly affect the depreciation. Consider repainting your vehicle if it has lots of deep scratches and corrosion signs.

You could also go for a repaint if you are planning to sell your car soon. A shiny good-as-new look in your car will bump its selling price.

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