Top 10 Cars That Depreciate the Most: What Does It Mean for Car Insurance?

Some Masaratis and BMWs really don’t depreciate well at all. Some Jaguars don’t hold their value either. But it’s not just luxury cars that depreciate in value (Porsches hold their own, FYI) – but all cars lose value over time.

Some cars depreciate less quickly than others, but average at about 39% decrease in value compared with an original MSRP after five years of use. Trucks and hybrid vehicles fare the best, losing only 35% and 37%, respectively. Electric vehicles (EVs) lose value the most, at about 50% depreciation after five years.⁽³⁾

Gap coverage will cover the remaining balance on a car that depreciated to the point that you owe more than you’ll get back from the car insurance company, if it’s totaled or stolen.⁽²⁾

Here’s more on car depreciation and which cars depreciate the worst and best.

On This Page

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  What Is Car Depreciation?

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  Top 10 Luxury Cars That Depreciate the Most

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  Gap Coverage and Depreciation

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  How Does My Car’s Depreciation Affect My Insurance Premiums?

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  Top 10 Cars That Depreciate the Least: Car Depreciation Chart

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  Car Depreciation FAQs

What Is Car Depreciation?

Car depreciation is the amount of value the car loses over time. From the moment someone buys a car and leaves the lot, a brand new car will depreciate 10%.⁽¹⁾

If you buy a $50,000 car, you’re losing $5,000 in value in minutes. Over the days, weeks, months and years following the purchase the vehicle will depreciate even more, and if it experiences an accident, it will depreciate quite a lot, even after it’s repaired. This is why car buyers always ask if a car’s been in an accident when buying a used car.

Factors That Cause Car Depreciation

While car shoppers differ in how they prioritize the following features, these are some of the most commonly considered factors in purchasing a car. Therefore, they will affect how much the resale value of the car will be.

• Mileage: Low mileage indicates a longer life for the car so people will pay more.
• Make and model: People usually want a newer model. In some rare cases, certain years are more expensive than others.
• Market demand: Some cars are more reliable than others or have luxury appeal. Certain cars will resell better, even with age.
• Age: Usually, the newer it is, the more expensive it will be.
• Accidents: Some buyers refuse a car that’s been in an accident, and those who will buy a car with an accident history expect to pay much less.
• Number of owners: The more the car has changed hands, the less valuable it will be.
• Overall condition: The interior and exterior of the car will determine how much a car costs.
• Fuel economy: Most people want to pay less on gas each month, unless they want a specific car that is known to be a gas guzzler, like a classic Cadillac, and they are willing to put up with the high cost.
• Color: Neutral colors sell better than other colors. Some colors give away the fact that it’s a used car too.
• Warranty: Whether or not a car is still on warranty is a big determinant of pricing, because it means fewer out-of-pocket costs for car problems, at least for the duration the warranty is valid.
• Technology: Older cars don’t have the latest technology and safety equipment and wil therefore cost less in most cases, unless it is a classic car.

Top 10 Luxury Cars That Depreciate the Most

Data is based on 5 years of depreciation.⁽⁴⁾

Gap Coverage and Depreciation

When buying a car, take the agreed upon total price of the vehicle and subtract 10% to see what your car will be worth when you leave the dealership. If you’re financing more than that amount, you will have what is called “an upside down loan,” which simply means you owe more than what the car is worth on the market.

The reason why this matters is that gap coverage is the only type of car insurance that will pay for the outstanding balance between what you owe and the car’s market value. If your car is considered a total loss after an accident or it is stolen, your collision or comprehensive insurance coverage will pay you the value of the car, not what you owe, unless you have gap coverage.

Do not buy gap coverage at the dealership because it’s much more expensive than buying it from an insurance company directly.

How Does My Car’s Depreciation Affect My Insurance Premiums?

As a vehicle depreciates in value, coverages like collision and comprehensive should drop as well, because there is less to pay out if there is a total loss. Liability coverage will stay the same or rise with inflation, market performance and the rise in severe weather. The drop will be incremental. However, with the rise in car insurance over the past few years, the reduction of insurance cost due to depreciation may not be very noticeable.

Top 10 Cars That Depreciate the Least: Car Depreciation Chart

Data is based on 5 years of depreciation.⁽³⁾