Depreciation is inevitable. But some cars depreciate slower than others.
On average, a vehicle will only retain about 35% of its original value after five years, but ones in high demand as used cars will retain closer to 50%.
“The depreciation rate of a particular vehicle is dependent upon market conditions, supply and demand,” says Charlie Vogelheim, executive editor of the Kelley Blue Book, tracker of used-car values. “A highly popular or desirable car with limited availability will depreciate slower than a car that is in excess supply or less desirable.”
There are things that buyers absolutely expect in a car today. If they are not there, it could hurt the value and desirability of that car down the road.
Those include power windows and door locks, tilt steering wheel and cruise control. Wheels have also come a long way from the days of hubcaps. Alloy or premium wheels will likely help sell a vehicle down the road.
Those things don't add value. Instead, value is deducted if they are not there.
What hurts future value? For one thing, the wrong color.
It's easy to sell a white, black or silver car. Some variations of red and blue are fine.
Green, purple, yellow or orange hurt maximum resale or trade-in value chances.
Vogelheim says personalizing a car with custom paint or wild modifications also make a car less desirable.
“Sometimes we see people putting thousands of dollars worth of aftermarket options and customization into a vehicle, and it's likely that they'll never get it back,” he says.
He says the very things that personalize the car make it less desirable to a broad customer base in the used-vehicle market.
A vehicle with an upgraded engine will most often hold value better.
Other value enhancers are sun roofs, leather seats, anti-lock braking systems, CD players or disc changers, premium sound systems and, on wagons and SUVs, roof racks and third-row seating.