How long to keep a car before selling

Buying a new car is an exciting experience.

How long to keep a car for best value

The new car smell, the latest tech and safety features, and the smooth ride can make a new car purchase seem worth the money. But cars depreciate rapidly in the first few years. It’s important to understand how long to keep a car to maximize its value and get your money’s worth before trading it in or selling it.

How quickly does a new car depreciate?

Depreciation is the loss of a car’s value over time.

A new car can lose 10-30% of its value in the first 12 months.

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How long should you keep a car before trading it in

By the end of year 2, a car may have lost 40% of its original value. Depreciation slows down after the first few years, but after 5 years, a car’s trade-in value is typically only 60-70% of its original MSRP. Luxury and performance brands tend to depreciate faster than mainstream brands.

Here’s an example of typical depreciation over the first 5 years for a $30,000 mainstream brand sedan:

Year	Value	Percent of Original Value
1	$21,000	70%
2	$18,000	60%
3	$15,000	50%
4	$12,000	40%
5	$9,000	30%

As you can see, the car loses value rapidly

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