If you’ve ever bought a new car, you probably know that sickening feeling when you realise it’s already worth less the moment you drive it out of the dealership. That, mate, is depreciation — and it’s a silent wallet-killer for car owners across Australia.
But don’t worry — understanding how it works can help you make smarter choices, whether you’re buying, selling, or just holding onto your car. Let’s break it down in a straightforward way, without the jargon.
So, What Is Depreciation?
Depreciation is just a fancy term for how much value your car loses over time.
Unlike houses (which can go up in value), cars typically go down. That’s because they wear out, new models keep coming out, and demand changes. The value of your car isn’t just based on age — it’s influenced by condition, mileage, brand reputation, fuel type, and even market trends.
How Fast Do Cars Lose Value?
On average in Australia, a brand-new car loses around 15–25% of its value in the first year alone. After five years, many cars are worth less than half of what you originally paid.
Here’s a quick snapshot of average depreciation for a standard car:
- Year 1: 20% loss
- Year 2: Another 15%
- Year 3-5: Around 10% per year
- Year 6 onwards: Slows down a bit — but still dropping
That means a $40,000 car could be worth just $18,000–$20,000 after 5 years, depending on how well it’s looked after.
What Impacts Your Car’s Depreciation Rate?
Not all cars lose value at the same speed. Here are the big factors that influence it:
- Make and Model
Some brands hold value better than others. Toyotas, for example, are known for reliability and tend to depreciate slower than lesser-known brands. European luxury cars (like BMW or Audi) can drop faster due to higher maintenance and repair costs.
- Mileage
A lower odometer reading = higher resale value. If you drive 30,000 km a year, your car will lose value quicker than one driven 10,000 km a year — even if they’re the same age.
- Condition
Scratches, dents, worn-out interiors, or faded paint all chip away at value. Keeping your car tidy goes a long way when it’s time to sell.
- Service History
Buyers love a well-documented car. Logbooks with regular servicing stamps boost buyer confidence and help you fetch a better price.
- Fuel Type and Economy
With fuel prices rising in Australia, cars with better fuel efficiency or hybrid options are holding their value longer. Gas-guzzlers, on the other hand, are falling out of favour.
- Market Shifts
COVID changed the game. For a while, used cars were holding value better than ever due to supply chain delays. But as things settle, we’re seeing depreciation patterns return to normal.
Real-World Example
A mate of ours bought a brand-new Hyundai Tucson in 2020 for around $38,000. Fast forward to 2024, the car’s in great condition with 75,000 km on the clock, but it’s worth around $23,000–$25,000. That’s about a 35% drop — and fairly normal for a mid-size SUV over four years.
Now compare that to someone who bought a five-year-old Corolla in 2020 for $15,000. Today, that same car might still fetch close to $12,000, because it’s already passed the steepest drop.
Can You Slow Down Depreciation?
You can’t stop depreciation completely — but you can minimise its impact with a few smart moves:
- Buy used instead of new — Let someone else take that first-year hit.
- Keep your car clean and serviced — A full logbook is gold when selling.
- Limit unnecessary mileage — Fewer kms = better value retention.
- Stick to popular colours — Neutral tones (white, silver, black) tend to sell easier.
- Avoid over-customising — Flashy mods might turn buyers off later.
When Does Depreciation Matter Most?
If you plan to sell or trade in your car after just a few years, depreciation hits hard. The shorter you own a car, the more value you lose — fast.
But if you drive your car for 10+ years or run it until it’s ready for the wreckers, depreciation becomes less of a concern. You’ve squeezed the most out of the value, and when it’s done, companies like ours can help recycle it and pay you some cash back.
Got a Car That’s Lost Too Much Value?
We see this all the time — cars that aren’t worth fixing anymore, or vehicles that have simply dropped below what you hoped for. If your car has lost too much value due to age, damage, or high mileage, it might not make sense to sell it privately.
That’s where we come in. As a car removal company, we offer cash for cars in any condition — even if it’s old, not running, or completely depreciated. You’d be surprised how much we can still offer for vehicles the dealers won’t touch.
A Quick Takeaway
Car depreciation is a part of life, just like rego and insurance. But with the right choices, you can soften the blow and make the most of your car’s value over time.
Whether you’re buying smart, maintaining well, or choosing the right time to sell — a little planning goes a long way. And when your car’s value hits rock bottom? We’re just a phone call away, ready to offer you a fair price and free car removal.
Drive smart, sell smart, and don’t let depreciation catch you off guard.
If you are in Delahey, and looking to sell your car, this is the best way to find us.
1/26 Acacia St, Glenroy VIC 3046
0437 773 905
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