How much do cars depreciate?
Depreciation is usually the biggest cost of owning a newer car, bigger than fuel, insurance or tax. A typical new car loses around 15 to 35% of its value in the first year and around half by year three. After that the losses slow down, at roughly 10 to 15% a year.
| Year of ownership | Holds value well | Average | Loses value fast |
|---|---|---|---|
| Year 1 | 15% | 22% | 33% |
| Year 2 | 12% | 15% | 20% |
| Year 3 | 10% | 13% | 16% |
| Year 4 | 9% | 12% | 14% |
| Year 5 | 8% | 11% | 13% |
| Years 6 and later | 8% | 10% | 12% |
| Value left after 3 years | 67% | 58% | 45% |
Percentages are of the value at the start of each year. These are our typical profiles based on published UK used car value trends, not data for a specific model.
What affects depreciation
- Mileage. Cars well above 10,000 miles a year are worth less. The MOT history shows recorded mileage, so buyers can check it.
- Brand and model demand. Popular, reliable models in short supply hold value best.
- Fuel type. Used electric car prices fell sharply in 2023 and 2024 as new EV prices dropped, though they have steadied since.
- Condition and history. A full service history and a clean MOT record support a higher price.
- Colour and options. Unusual colours can be harder to sell. Expensive options rarely add their cost back.
How to lose less money
Buying a car that is two or three years old lets the first owner take the steepest drop. Keeping a car longer spreads the loss over more years. And a well-documented car, with a clean MOT history, is easier to sell for a good price.
Sources
Rates and rules last checked 15 October 2026. These figures are a guide. For a decision that matters, confirm with the official source.