What is the depreciation rate of used cars?
3 Answers
According to the empirical algorithm, this method was first announced by the official but has low practical value and is rarely used. The depreciation rates for the first 5 years of a new car are 15%, 12%, 10%, 8%, and 7% respectively. After 5 years, the annual depreciation rate is approximately 5%. Therefore, for a car used for 4 years, the depreciation rate would be 15% + 12% + 10% + 8% = 45%. Points to note when buying a used car: Choose a reliable platform: When selecting a used car trading platform, always choose one with a good reputation to avoid being scammed by dealers. Documentation: Verify that the vehicle's documents are authentic and complete. Ensure that the engine number and chassis number on the documents match those on the vehicle, check if the vehicle can be transferred, and confirm whether the car has any mortgages, court seizures, financial disputes, or unresolved violations. Also, check if the inspection and insurance are overdue, and if there are any specific requirements for transferring vehicles owned by corporate entities. Vehicle condition: Be cautious about cars in poor condition, no matter how cheap they are. After identifying the ideal model, if the budget allows, try to choose a car with fewer years of use.
The depreciation rate of used cars isn't a fixed number—it depends on the car's condition, brand, and age. Generally, a new car loses 15% to 25% of its value in the first year, with popular models depreciating less and less popular ones more. After three years, it might be worth only half its original price, and by ten years, roughly 30% of the new car price remains. Many factors influence this, with brand resale value being crucial. Japanese brands like Toyota and Honda tend to depreciate slower, while premium German cars drop sharply in the first few years. Mileage also matters—cars with 100,000 km may depreciate 20% more than low-mileage ones. Well-maintained cars lose less value. When buying, pay attention to market reputation, not just price. I've seen many car owners regret not maintaining their cars better before selling—regular oil changes and interior cleaning can boost resale value. For precise estimates, check online tools or apps by entering the car's model and year.
Let me explain used car depreciation from a daily driving perspective. The biggest hit comes right after buying a new car, with the first two to three years being the worst—typically losing 15% to 25% in the first year, followed by about 10% annually. Key factors include brand and condition: luxury cars like Mercedes depreciate faster due to expensive maintenance, while reliable compact cars like the Honda Fit hold their value better. Mileage also matters—every additional 10,000 km may reduce value by 1% to 2%; for example, a ¥200,000 new car might be worth ¥160,000 after 50,000 km. Condition is crucial too—scratches or worn interiors can further lower the price. When buying, focus on models with high resale value. Before selling, clean the engine and tires to save at least a few thousand yuan. Popular EVs now depreciate slower thanks to attractive new features. Overall, don’t expect big profits from resale—keeping the car longer before upgrading is smarter.
