The Car Depreciation Curve in 2026: What Your Car Loses Year by Year
A new car sheds roughly 20% the moment it is titled and about 45–55% by year five. The curve is steep early, then flattens — which is exactly why buying at year three and selling before year seven tends to win.
Key takeaways
- A new car loses ~20% at year one and ~45–55% by year five.
- Depreciation is steepest in years 1–3, then flattens.
- Trucks and compact SUVs hold value best; luxury and EVs worst.
- Buy at year 3, sell before year 7 to dodge the steep and the repair climb.
- Mileage and condition bend the curve more than brand alone.
The shape of the curve
Depreciation is not a straight line — it is a cliff followed by a slope. A typical new car drops about 20% in year one (the moment it is titled), another 10–15% in year two, and settles to roughly 45–55% of MSRP lost by year five. After that the curve flattens because the car is already cheap; year six to ten each take a smaller percentage bite but more absolute repair cost.
The year-by-year table
| Year | Typical retained | Cumulative loss |
|---|---|---|
| 0 (new) | 100% | 0% |
| 1 | ~80% | ~20% |
| 2 | ~68% | ~32% |
| 3 | ~58% | ~42% |
| 5 | ~45% | ~55% |
| 7 | ~35% | ~65% |
Which bodies fight the curve
Trucks and compact SUVs retain ~70–75% at three years; luxury sedans and EVs sit near 40–55%. Body style and demand beat brand badge when it comes to holding value.
The buy-year-three, sell-before-seven rule
The math rewards a specific habit: buy at year three, when the original owner absorbed the steepest drop, and sell before year seven, before repair cost and age acceleration bite. A 3-year-old compact SUV at ~70% of MSRP with years of life left is the sweet spot. Used EVs break even earlier because their curve is steeper — see our <a href="/guides/used-ev-market-crash-2026-tesla-depreciation">used EV crash guide</a>.
What bends your specific curve
- Mileage: every 10k extra miles over average knocks a few percent.
- Condition: accident history and neglect compound the loss.
- Color and options: neutral colors and popular trims resell faster.
- Market shocks: tariffs and credit repeal moved whole segments at once.
- Check your number with our <a href="/calculators/car-depreciation/">car depreciation calculator</a>.
Frequently asked questions
How much does a car depreciate per year?+
What type of car holds value best?+
When is the best year to sell a car?+
Does mileage or age hurt value more?+
How do I estimate my car’s depreciation?+
Calculate car depreciation by make, model, and year. See 5-year depreciation curve and which vehicles hold value best.
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