Car depreciation by brand in 2026: which vehicles hold value best

Which vehicle categories hold value best — and worst

The iSeeCars 2024 Car Depreciation Study — the most comprehensive publicly available dataset at 8.3 million used-vehicle transactions — ranks vehicle categories by five-year depreciation from original MSRP. The hierarchy is consistent across model years:

Source: iSeeCars 2024 Car Depreciation Study (8.3M transactions, normalized to 12,000 miles/year per BTS national average, excluding fleet sales). Per Karl Brauer, Executive Analyst at iSeeCars.

The Toyota Tacoma and Jeep Wrangler consistently appear at the top of every iSeeCars depreciation ranking — not because they are inexpensive, but because they have inelastic demand from a dedicated buyer base. Tacomas hold work utility (commercial and recreational); Wranglers hold off-road cachet that does not dilute with age the way general-sedan appeal does. Honda CR-V and Toyota RAV4 are the practical-SUV equivalents: high-volume production but equally high replacement demand from families who specifically want those models used.

Year 1 loss mechanics — the new car smell tax

New vehicles depreciate faster in Year 1 than in any subsequent year. The mechanics: the moment a vehicle leaves dealer inventory and registers with a state DMV, it becomes a “used” vehicle in NADA and KBB systems. Used vehicles trade at a discount to new vehicles with the same MSRP and equipment, regardless of mileage. The exact Year 1 loss is category-dependent:

• European luxury sedans:20–30% in Year 1. The gap between new MSRP and used-car comparable is widest for luxury, because luxury buyers typically prefer new over certified-preowned, and the residual value at lease end (set by the captive finance company) is often above the open-market clearing price for popular configurations.
• Non-Tesla EVs:17–28% in Year 1, with high variance by model. Federal EV tax credit availability for the new version directly compresses used-market prices: if a new model qualifies for a $7,500 credit, used versions of the same model priced above the IRA used-EV credit cap ($25,000) face additional demand-side pressure. The 2023–2024 federal credit restructuring created a visible step-down in used-EV values in the iSeeCars data.
• Pickup trucks:10–17% in Year 1 for top-holding models (Tacoma, Wrangler). Certified-preowned programs from Toyota and Jeep narrow the new-vs-used gap, and supply of used trucks relative to demand has been structurally tight since 2021 supply-chain disruptions created lasting inventory shortfalls.
• Midsize sedans:14–20% in Year 1. Toyota Camry holds best in category; domestic brands (Chevrolet Malibu, Ford Fusion, Chrysler 200) have lost ground as manufacturers discontinued many mid-sedan lines, reducing certified preowned programs and buyer confidence in long-term parts availability.

The practical implication for buyers: a one-year-old vehicle with 8,000–12,000 miles is typically 15–25% less expensive than the same vehicle new, while carrying 95% of the original useful life and factory warranty coverage in most states (when CPO-certified). The Year 1 buyer absorbs the new-car premium and transfers it to the secondary market on the first sale.

Category-by-category depreciation curves — Years 1 through 5

Depreciation is not linear. The iSeeCars dataset shows a consistent pattern: steep front-loading in Year 1, a deceleration through Years 2–3 as the vehicle settles into the “sweet spot” used market, and then a modest acceleration again at Years 4–5 as vehicles approach 60,000+ miles and begin to trigger higher repair-risk perception among buyers.

Representative year-by-year curves from iSeeCars 2024 (cumulative from original MSRP, normalized to 12,000 miles/year):

Illustrative midpoints derived from iSeeCars 2024 category ranges. Individual models vary within these ranges depending on trim level, powertrain, color, and regional market conditions. Source: iSeeCars 2024 Car Depreciation Study.

The luxury depreciation curve is the most important for total ownership cost. A $65,000 BMW 5-Series purchased new depreciates roughly $16,250 in Year 1 alone (25%). At Year 5 it is worth approximately $26,000 (60% depreciation) — meaning the buyer absorbed $39,000 in depreciation over five years, or $7,800/year before financing costs. The same $39,000 in depreciation funds roughly 120 months of fuel and maintenance on a $26,000 compact SUV held for the same period.

How mileage affects resale value

The iSeeCars dataset normalizes to 12,000 miles/year — the Bureau of Transportation Statistics (BTS) national average for personal vehicle use. Deviation from this baseline creates a mileage adjustment in NADA and KBB valuations that follows a consistent rule of thumb: approximately $0.10–$0.15 per mile above or below the 12,000-mile annual baseline, adjusted for vehicle category.

Worked examples at the 5-year mark using iSeeCars category curves:

• Low-mileage vehicle (7,500 miles/year, 37,500 cumulative at Year 5): Approximately 8–12% higher resale than the 12,000-mile baseline for the same model year. A Toyota RAV4 with 37,500 miles commands roughly a $1,800–$2,700 premium over the same-year RAV4 with 60,000 miles (KBB private-party value methodology).
• High-mileage vehicle (20,000 miles/year, 100,000 cumulative at Year 5): Approximately 18–25% below the 12,000-mile baseline. A 5-year-old Honda Accord with 100,000 miles may trade $4,000–$6,000 below the same-year low-mileage equivalent. High mileage also accelerates buyers’ perception of remaining useful life risk, compounding the mileage penalty.
• Lease-return vehicles (10,000–12,000 miles/year cap): Lease terms typically cap at 10,000–15,000 miles/year, producing return vehicles at or below the national average. These vehicles are the primary source of CPO inventory and typically command a 5–8% premium over equivalent non-CPO used vehicles (KBB CPO value adjustment methodology).

The mileage adjustment does not apply uniformly across all vehicles. Work trucks (F-150, Ram 1500) used commercially often carry 30,000+ miles/year and buyers in that market expect high-mileage inventory — the penalty is smaller relative to the base depreciation curve. In contrast, luxury vehicles have a high-mileage cliff around 75,000 miles where buyers begin factoring in projected maintenance costs for out-of-warranty major components (turbo systems, air suspensions, DSG transmissions), creating a steeper-than-linear discount.

Accident history overlay — what a reported incident actually costs you

NADA and KBB build accident-history overlays into their trade-in and private-party value methodologies, cross-referenced against Carfax and AutoCheck vehicle history reports. The overlays are structured around incident severity:

Source: NADA trade-in value methodology; KBB private-party value adjustment documentation. Adjustments are applied on top of the base depreciation curve; a vehicle in the −47% midsize-sedan curve with a minor accident carries a combined −10% × (1 − 0.47) MSRP effective reduction.

The salvage/rebuilt-title designation creates the largest permanent discount. Most institutional used-car buyers (CarMax, Carvana, AutoNation) decline to purchase salvage-title vehicles, severely limiting the seller’s exit market to independent lots and private-party buyers who discount aggressively for the title status. Rebuilt-title vehicles may qualify for comprehensive and collision coverage at some carriers, but the coverage typically pays actual cash value (ACV) — which itself reflects the salvage discount — rather than the full MSRP rebuild value.

Minor and moderate accidents reported via Carfax do not always appear in state DMV records (cash-pay minor repairs are frequently unreported to insurance), but dealer trade-in appraisers use paint-thickness gauges and frame-inspection tools that flag prior body repair even when Carfax is clean. Private buyers should order a pre-purchase inspection from an independent mechanic before purchasing any used vehicle from a private party.

How to use depreciation data when buying or selling

The iSeeCars depreciation curves translate directly into three practical decision frameworks:

1. Buying a new vehicle — calculate Year 1 loss before signing

Before committing to a new-vehicle purchase, model the Year 1 depreciation hit. On a $45,000 midsize SUV (−17% Year 1), you absorb $7,650 in depreciation in the first 12 months, before financing costs. On a $65,000 European luxury sedan (−25% Year 1), you absorb $16,250. The question to ask: is the new-vehicle premium justified by the specific configuration, warranty terms, or certified-preowned eligibility — or can a 12-month-old equivalent deliver the same ownership experience for 15–25% less?

2. Selling or trading in — time the exit to the curve

Vehicles lose the most value in Year 1 and continue depreciating through Year 5. For sellers deciding between Year 3 and Year 5 exit, the difference between the cumulative curves (e.g., −31% vs. −40% for pickup trucks, on a $40,000 purchase) is $3,600 in resale value over 24 months. For sellers whose vehicle is approaching a high-mileage threshold (60,000 miles for luxury, 75,000 for compact sedans), the acceleration in the depreciation curve after that threshold makes earlier exit more cost-effective in total ownership cost terms.

3. Insurance coverage decisions — dropping collision and comprehensive

The 10% rule from Consumer Reports: if the annual collision + comprehensive premium exceeds 10% of the vehicle’s current market value, the coverage may not be cost-effective. Depreciation data operationalizes this rule. A $30,000 compact SUV at Year 5 (−42% iSeeCars category average) has a market value of approximately $17,400. If collision + comprehensive premiums are $2,000/year (11.5% of the vehicle’s remaining value), the rule triggers and self-insuring the physical damage risk becomes actuarially defensible. Use the Car Depreciation Calculator to project your specific vehicle’s market value at Year 3, 4, and 5 to identify when this threshold crosses.

Important: if you have an outstanding auto loan or lease, your lender or lessor requires full coverage as a condition of the financing — the 10% rule does not apply until the vehicle is owned free and clear. See our auto insurance coverage guide for how coverage decisions interact with vehicle value over time.

How I project a car’s real cost — a worked example

When I price a vehicle as a financial decision, I’ve found depreciation, not the sticker, is the number that decides it, so I always project market value year by year before I look at the monthly payment. The model is simple to show your work:

Projected market value at year N =
    MSRP × (1 − category_5yr_loss × year_curve_weight[N])

where:
  MSRP                 = original sticker price
  category_5yr_loss    = 5-year depreciation share for the segment (iSeeCars 2024)
  year_curve_weight[N] = share of total 5-yr loss realized by year N
                         (front-loaded: ~year 1 is the steepest)

Worked example — $40,000 compact SUV (category ≈ 42% five-year loss):
  Year 1 (≈20% of MSRP):   value ≈ $32,000   (lost $8,000 — the steepest year)
  Year 3 (≈33% of MSRP):   value ≈ $26,800
  Year 5 (≈42% of MSRP):   value ≈ $23,200

Buy the same SUV at 2 years old instead of new and you skip the
$8,000 first-year hit entirely — that gap is the strongest financial
argument for buying lightly used rather than new.

Assumptions:category five-year loss rates come from the iSeeCars 2024 study of 8M+ transactions; the year-by-year curve is front-loaded because first-year depreciation (~17–30%) dominates. Figures ignore mileage extremes, accident history, options, and regional demand, all of which move a specific car’s value. National annual mileage assumes the BTS ~12,000-mile average. These are estimates, not a guaranteed resale price or financial advice.

The depreciation curve, the year weights, and the assumptions above are operationalized in the depreciation methodology and the open-source calculator source on GitHub (packages/calc).

Primary sources cited

• iSeeCars 2024 Car Depreciation Study
• Bureau of Transportation Statistics — Average Annual Miles
• Kelley Blue Book Private-Party Value Methodology