Key Takeaways

• Car depreciation is the natural decline in value as a vehicle ages and accumulates miles.
• New cars lose value fastest, often dropping 15% or more the moment you drive them off the lot.
• Buying used slows the depreciation curve since the steepest drop has already happened.
• Certified pre-owned vehicles depreciate faster than used cars but come with warranty advantages.
• Choosing between new, CPO, and used depends on your priorities: warranty, tech, or lower depreciation.

There is an aspect of car ownership that you may have heard of, but perhaps you have not taken a lot of time to consider it. It’s that vehicles depreciate over time. That’s not something you can entirely avoid if you own a car, but there are ways to combat it to some degree.

Looking into Waxahachie used cars might be the way to go if you are concerned about depreciation. If you buy a used car, it will not depreciate in the same way a brand new or certified pre-owned one will.

Let us take some time to talk about this concept in greater detail.

What Does Car Depreciation Mean?

Let’s start by defining car depreciation so we can be sure you know what we mean when we use this term. When your vehicle depreciates in value, that means its worth is going down.

Usually, this happens as cars age. When you put miles on the vehicle, the value depreciates. There are also various other aspects of the car’s condition that go into its depreciation, such as whether you are taking it for regular maintenance or whether you’re not paying as close attention to its upkeep as you should.

Now, let’s talk about why buying used cars means a slower depreciation cycle than when you buy a brand new or certified pre-owned one.

When is the Moment When Cars Depreciate Fastest?

There are three ways you can buy a car. The first is if you buy one brand new from the manufacturer. This can be useful in the sense that you’re getting a vehicle with no miles on it. Also, it presumably comes with an impressive package of the latest technology the manufacturer offers.

The second way is to buy a certified pre-owned vehicle. This is one that is gently used. It probably had one previous owner and will not have many miles on it. Usually, the manufacturer makes a car available via certified pre-owned status after getting the vehicle back from someone who leased it.

The final way to buy a car is to get it used. Such a vehicle might have any number of miles on it. It may have had several previous owners, and it could be in just about any imaginable condition.

The time when cars depreciate the fastest is when you buy a brand new one, sign the applicable paperwork, and drive it off the lot. The depreciation that takes place then usually amounts to several thousand dollars, at a minimum. Some car websites estimate that a vehicle loses 15% of its value or more the moment it is no longer considered brand new.

If you don’t buy a car brand new, and you purchase it used instead, the depreciation process will be slower. It’s also normally true that the process will slow down if you buy a used car instead of a certified pre-owned one.

Why Does Buying a Used Car Mean That It Depreciates Slower?

You might be confused as to why the depreciation of a car is faster and more noticeable with certified pre-owned vehicles or brand-new ones versus used ones. The reason is that there are certain intangibles that go along with each of these three vehicle categories.

If you’re driving a new car off the lot, then that vehicle is presumably under some type of warranty. This is standard with any car you buy used. A certified pre-owned vehicle will also often come with a relatively generous warranty, if not quite as good of one as you will get when you buy one brand new.

Part of a car depreciating, or its value going down, happens naturally with the passage of time. Another aspect of it losing value is when it’s no longer under warranty.

That means, if you don’t want a dramatic price drop with the car you’re buying, getting it when it’s already no longer under warranty and buying it when it’s not brand new are actually to your benefit. It’s true that if the vehicle breaks down, you will not have that warranty to fall back on. There will be less of a large depreciation drop off, though, and perhaps that’s what you’re focused on the most.

Is Buying Used Worth It for This Reason Alone?

While it’s true that in most instances, depreciation will be slower if you buy a used car instead of a certified pre-owned or brand-new one, that does not necessarily mean it’s always the best move. Yes, depreciation will happen if you buy a car brand new or certified pre-owned, but you still get that warranty, and some drivers feel like its worth offsets this particular concern.

Nobody likes the thought of their car losing value as it gets older and there are more miles on it, but it’s virtually unavoidable. Depreciation isn’t something you’ll ever enjoy, but what if you have enough money to buy a car that’s either brand new or certified pre-owned?

If you do, then it’s at least worth considering going in that direction instead of buying used. You will doubtless see a sharper drop in the car’s worth during the first months and years of you owning it, but you will have that handy warranty in place. You’ll also have fewer miles on the car and newer tech than you could enjoy if you bought an older model just to avoid steep depreciation.

Ultimately, each car buyer will need to look at their financial capabilities and the type of vehicle they need as they start to narrow down their search. If you’re concerned only on avoiding steep depreciation, then buying used makes sense, but if you want a vehicle with fewer miles and a longer warranty, then either brand new or certified pre-owned is preferable.

Depreciation is notable with cars, but as long as you take good care of yours, regardless of its status when you bought it, that should help maximize its value. That’s really all you can hope to do as a vehicle owner.

FAQs

How much value does a new car lose immediately?

On average, a new car loses around 15% or more of its value the moment it leaves the dealership lot.

Do certified pre-owned cars depreciate as quickly as new ones?

Not as quickly, but still faster than fully used cars since they carry warranty and lower mileage premiums.

Is buying used always cheaper in the long run?

Not always. While depreciation is slower, you may face higher maintenance costs and fewer warranty protections.

Can proper maintenance slow car depreciation?

Yes. Regular servicing, careful driving, and keeping records can help retain more resale value.

What’s the best age to buy a used car?

Many experts recommend cars that are 2–4 years old, as the steepest depreciation has passed but the vehicle is still relatively new.