True. “The first hit on the car is basically immediate,” said Richard Arca, director of vehicle valuations and analytics for Edmunds.
If you traded in your vehicle within a week or so, you’re losing the sales tax and fees you paid on the car — about 11%.
Plus, the dealership will offer you less since the car is no longer new and it needs to make a profit on the sale.
That will lead to a further drop of 8%-10%, Arca said.
Ultimately, the dealership will plan to sell it for around 4% less than what a new one would go for, he added.
On average, a new vehicle depreciates by 30.5% in its first year, 7.7% in the second and 6.8% in the third year, according to Edmunds data.
This depreciation figure is an average among all brands, but as a general rule, luxury vehicles will depreciate faster, while vehicles with higher resale value (a Toyota Tacoma, for example) will be closer to 20% in the first year.