Car Depreciation Curve 2026: Year-by-Year Losses by Vehicle Type

The average car depreciation curve over 10 years

A new car loses value every year, but the rate is not linear. The average vehicle depreciates roughly 20% in the first year (the moment you drive off the lot), then 15% in year 2, 10% in year 3, 8% in year 4, 7% in year 5, and 5-6% per year thereafter. Cumulatively, the average car is worth about 80% of MSRP after year 1, 68% after year 2, 60% after year 3, 55% after year 4, 50% after year 5, 45% after year 6, 40% after year 7, 35% after year 8, 30% after year 9, and 25% after year 10. The steepest loss is in the first three years, which is why three-year-old used cars are the sweet spot for buyers: the previous owner absorbed the steepest depreciation, and the remaining value represents most of the vehicle's useful life. The curve flattens significantly after year 5, meaning older used cars hold value relatively well. Use our <a href="/calculators/car-depreciation/">car depreciation calculator</a> to model specific vehicles.

Depreciation by segment: trucks vs sedans vs EVs vs luxury

Depreciation varies enormously by segment. Pickup trucks (F-150, Silverado, Ram) depreciate slowest, retaining about 66% of value after five years (34% loss), because truck demand is consistently strong and they are useful work vehicles. Midsize SUVs (4Runner, Tahoe, RAV4) retain about 58-62% (38-42% loss). Compact sedans (Civic, Corolla) retain about 55% (45% loss) due to steady commuter demand. Midsize sedans (Camry, Accord) retain about 52% (48% loss). Full-size luxury sedans (BMW 7 Series, Mercedes S-Class) retain only 25-35% (65-75% loss), the steepest depreciation of any segment, because luxury buyers want new and the maintenance costs of older luxury cars scare off used buyers. Luxury SUVs (X5, GLE, Q7) retain about 40-45% (55-60% loss). EVs vary widely: Teslas retain about 47-55% (45-53% loss), while non-Tesla EVs from 2019-2022 retain only 35-45% (55-65% loss) due to rapid technology obsolescence and battery anxiety. The tariff-driven new car price increases of 2026 helped used trucks hold value better than expected.

Which brands hold value best in 2026

According to Kelley Blue Book and iSeeCars 2026 data, the brands that hold value best over five years are Toyota (58% retained), Honda (55%), Subaru (53%), Porsche (52%), and Ford trucks (52%). Within these brands, specific models outperform: the Toyota 4Runner retains 65% over five years, the Toyota Tacoma retains 62%, the Honda Civic retains 56%, and the Subaru WRX retains 55%. The worst-performing brands for depreciation are luxury brands: BMW (38% retained), Mercedes-Benz (37%), Audi (39%), and Maserati (28%). The Lincoln Continental and Cadillac CT6 lose over 70% of their value in five years. EV brands are mixed: Tesla retains better than average (47-55%), but Nissan Leaf (35%) and Audi e-tron (32%) depreciate steeply. The pattern is clear: reliable, mass-market, utility-focused vehicles hold value, while luxury and technology-heavy vehicles depreciate fastest. Use our <a href="/calculators/car-depreciation/">car depreciation calculator</a> to check specific models.

How mileage affects the depreciation curve

Mileage is the second biggest depreciation driver after age. The average American drives about 13,500 miles per year, and vehicles are valued against this benchmark. A vehicle with below-average mileage (under 10,000 miles/year) retains value better; one with above-average mileage (over 18,000 miles/year) loses value faster. The impact is roughly $0.10-0.20 per mile above average for mainstream vehicles and $0.25-0.40 per mile for luxury vehicles. A three-year-old car with 40,000 miles (normal) is worth about 60% of MSRP; the same car with 80,000 miles (high) is worth about 48%. Mileage depreciation is not linear: it accelerates at 60,000 miles (when the powertrain warranty typically expires), at 100,000 miles (a psychological threshold), and at 150,000 miles (when major maintenance is due). For sellers, this means selling before 60,000 or 100,000 miles captures more value. For buyers, a high-mileage 3-year-old vehicle can be a bargain if it has been well-maintained. See our <a href="/calculators/mileage-depreciation/">mileage depreciation calculator</a>.

When depreciation slows and the best time to buy used

Depreciation slows significantly after year 5, from 7-8% per year to 5-6% per year, because the steepest initial loss is over and remaining value reflects the vehicle's remaining useful life. This creates a buying strategy: a 5-7 year old vehicle with 60,000-90,000 miles offers the best value per dollar, because you pay about 40-50% of original MSRP for a vehicle that may have 50-70% of its useful life remaining. The trade-off is higher maintenance costs as components age, but for reliable brands (Toyota, Honda, Subaru), a 7-year-old vehicle with 80,000 miles can provide 5+ more years of service with minimal major repairs. The worst time to buy used is the 1-2 year old range, because the vehicle has already lost 25-32% of its value but the remaining price is still close to new-car levels, and you inherit the remaining factory warranty but pay near-new prices. Use our <a href="/calculators/used-car-value/">used car value calculator</a> to find the depreciation sweet spot for specific models.

How to minimize depreciation on a car you own

Three strategies minimize depreciation on a vehicle you already own. First, maintain it meticulously: a complete service history from authorized dealers or reputable shops adds $1,000-3,000 to resale value and signals reliability to buyers. Second, keep mileage below average: every 10,000 miles below the annual average saves roughly $1,000-2,000 in depreciation. Third, choose the right time to sell: spring and summer are best for convertibles and family vehicles, fall is best for trucks and SUVs, and selling before 60,000 or 100,000 mile thresholds captures more value. Avoid selling after major model redesigns, which make your vehicle look outdated. For vehicles you plan to keep long-term (10+ years), depreciation matters less because you will extract the full useful life; the total cost of ownership is dominated by fuel, maintenance, and insurance rather than depreciation. Run the full total cost with our <a href="/calculators/total-ownership-cost/">total ownership cost calculator</a>.

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