How Fast Does Your Car Lose Value

A $40,000 sedan typically loses about 20% in year one, falling to roughly $32,000, then to about $19,600 by year 5 — total depreciation near $20,400. SUVs hold slightly better, while electric vehicles depreciate fastest, losing about 30% in the first year and ending near $13,200 by year 5. The steepest drop is always the first year, so buying gently used avoids the worst hit. The slowest annual loss comes later, which is when the calculator suggests selling if you must, though most owners save money by simply keeping the car long after it has bottomed out.