HomeBlogBlogFirst-Year Car Depreciation: New vs Used (2026 Guide)

First-Year Car Depreciation: New vs Used (2026 Guide)

How much depreciation should I expect in the first year for a new car vs a used car?

First-year depreciation is usually steepest on a brand-new car because it absorbs the biggest “early drop” in value the moment it’s titled and driven. A typical new car often loses about 15% to 25% of its value in the first year, depending on brand, trim, mileage, and local demand. Some models with strong resale (certain hybrids, trucks, and in-demand SUVs) can land closer to the low end, while luxury models and slow sellers can fall faster.

A used car generally depreciates less in its next year of ownership because the previous owner already took the initial hit. If you buy a 2–5-year-old vehicle, it’s common to see something like 8% to 15% depreciation over the next year, assuming average mileage and no major condition changes. Older used cars may drop even less in percentage terms, though their dollar-value drop can still matter if you’re financing or planning to sell soon.

What drives the difference?

The first owner pays for the “new” premium: full warranty, latest features, and that untouched condition. Once a car is no longer new, pricing becomes more tied to comparable listings, mileage bands, and vehicle history. That’s why buying lightly used can be a way to avoid the sharpest part of the curve.

How to estimate your personal first-year depreciation

Check real-world pricing for your exact model and trim in your area. Compare (1) the out-the-door price you’d pay today to (2) what similar vehicles that are one year older and have average miles are selling for. The gap is a practical estimate of what you might lose in a year. Also factor in mileage: driving well above average can accelerate depreciation, while low mileage can help preserve value.

If you’re deciding between new and used based on total ownership costs (not just depreciation), this broader breakdown can help: New vs. used car costs, warranty, and fit guide.

FAQ

Does mileage affect depreciation more than age?

Both matter, but mileage can move the needle faster when it pushes a car into a higher-mileage bracket than comparable listings. Age tends to set the baseline, while mileage and condition often determine whether the price lands above or below that baseline.