New car ownership reeks of depreciation


Meilani Bitanga

The student parking lot, a perfect example of depreciation. The hundreds of cars parked in the lot lose hundreds of dollars money every day as a result of depreciation. Photo taken on Sept. 26, 2019.

Shiny new paint on a beautifully sculpted body. A sleek modern interior. All of the latest technological innovations. The distinct new car smell. Most of which come standard on most new cars. Buying a new car may seem like a smart purchase and a great investment, but it will lose thousands of dollars in value as soon as it leaves the lot. 

This phenomenon known as depreciation kills the value of almost every late model car.

According to a study done by Edmunds in 2010, the brand new Nissan 370z loses 11 percent of its value as soon as it leaves the lot, and the car will lose 15-20 percent of its value per year for the next five years. After the car is five years old, the once advanced new car may only hold roughly 37 percent of its original value. 

Anyone who attempts to sell their once new 370z after five years of ownership will most likely feel bitter disappointment when they can only sell their $30,000 car for a mere $11,100. 

Depreciation does not affect all automobiles the same. Due to their high demand, trucks, and SUVs generally hold their value better than sedans and coupes, but these larger vehicles usually come with a larger price tag.

Depreciation largely depends on the manufacturer and model. A study done by Motor1 shows that the average BMW 7 Series will most only retain about 23 percent of its value after five years, while the average Toyota Tacoma will retain 61 percent of its original value over the same time span.

The best way around crazy high depreciation is to buy a used car that is at least five years old. 

If a buyer decides to take the smarter route by buying a five-year-old car, they will benefit from the original owner’s problem. As long as they buy the right car. According to, the average cost to maintain a BMW for 10 years is almost $18,000, and the average price to keep a Toyota on the road for 10 years is only $5,500.

All of a sudden, a fancy Lexus (owned by Toyota) looks better when it costs under $15,000, instead of the original $40,000 (or more) price tag.