When Does a Car Stop Depreciating? Finding the Value Floor

A new car loses 20% of its value the moment you drive it off the lot. It loses another 15% by year two. By year five, it’s worth about half what you paid.

But then something interesting happens. The depreciation slows down. And eventually, it nearly stops. That’s the value floor—and understanding it can save you thousands.

The Depreciation Curve

Car depreciation isn’t linear. It follows a curve:

• Year 1: -15 to 25% (steepest drop)
• Year 2: -10 to 15%
• Year 3: -10 to 12%
• Year 4: -8 to 10%
• Year 5: -6 to 8%
• Years 6-10: -3 to 5% per year
• Years 10+: Minimal or value stabilizes

A $50,000 car might be worth $25,000 at year 5, but only $15,000 at year 10. That’s $25,000 lost in the first 5 years, then only $10,000 in the next 5.

What Is the Value Floor?

The value floor is the point where a car stops depreciating significantly. It’s the “commodity price” for used transportation.

At this point, the car trades based on:

• Whether it runs
• General condition
• Mileage (less important than with newer cars)
• Market demand for that specific model

A 15-year-old Camry in good shape might sit at $4,000-6,000 for years, regardless of whether it’s 150k miles or 180k miles.

When Do Different Cars Hit Their Floor?

Economy cars (Civic, Corolla, Camry):

• Floor: $3,000-$6,000
• When: 12-15 years, 150k+ miles
• Why: High demand keeps values from falling further

Domestic trucks (F-150, Silverado):

• Floor: $8,000-$15,000
• When: 10-15 years
• Why: Work trucks stay valuable; demand is constant

Luxury cars (BMW, Mercedes):

• Floor: $5,000-$10,000
• When: 8-12 years
• Why: Maintenance costs scare buyers; supply exceeds demand

Sports cars:

• Floor: Varies wildly
• When: Some appreciate, some crater
• Why: Enthusiast demand is unpredictable

The Best Time to Buy Used

The sweet spot for buying is typically:

3-5 years old, 40,000-60,000 miles

• Steepest depreciation is over
• Still has modern features and safety
• Likely still under original powertrain warranty
• Enough history to spot problems

You might buy a car that was $50,000 new for $25,000—and if you keep it until the floor ($10,000), you’ve only lost $15,000 over 7+ years of ownership.

Compare to buying new: $50,000 → $25,000 = $25,000 lost in just 5 years.

The Best Time to Sell

Sell before:

• Major warranty expires (repair costs scare buyers)
• Big service intervals (timing belt, major fluid changes)
• It needs visible repairs (buyers lowball damaged cars)

Don’t wait until:

• It needs several thousand in repairs
• Mileage crosses major thresholds (100k, 150k)
• Market shifts (new model, changing preferences)

The perfect time to sell is when the car still runs well but depreciation is accelerating. For most cars, that’s years 4-7.

Cars That Hold Value

Some cars resist depreciation:

Toyota Tacoma: Legendary resale. A 5-year-old Tacoma might be worth 70% of MSRP.

Jeep Wrangler: Steady demand keeps values high. 40%+ after 5 years.

Porsche 911: Some years appreciate. Base models hold steady.

Toyota Land Cruiser: Cult following. 10-year-old models still pricey.

If you plan to sell eventually, buying a car that holds value offsets the higher initial price.

Cars That Crater

Some cars depreciate brutally:

Luxury sedans (S-Class, 7-Series): $100k new, $20k at 7 years. Maintenance fears kill values.

Maserati/Jaguar: High depreciation AND high maintenance. Double penalty.

First-year models: Unknown reliability scares used buyers.

EVs (older): Battery range anxiety and rapid tech improvements kill values.

If you buy these cars used, you get a lot of car for the money. But you inherit someone else’s depreciation problems.

The Hidden Cost of New Cars

Let’s do the real math:

Scenario 1: Buy new, keep 5 years

• Purchase: $45,000
• Value at 5 years: $22,500
• Cost of depreciation: $22,500 ($375/month)

Scenario 2: Buy 3-year-old, keep 5 years

• Purchase: $27,000 (same car)
• Value at 8 years: $13,500
• Cost of depreciation: $13,500 ($225/month)

Buying the same car 3 years older saves $150/month in depreciation alone. That’s $9,000 over 5 years.

Breaking Even on a Purchase

The break-even point is when your total cost of ownership (purchase minus eventual sale) equals what you got in value.

Example:

• Buy at 5 years old: $20,000
• Keep for 5 years (reasonable maintenance)
• Sell at 10 years old: $10,000
• Net depreciation: $10,000 over 5 years = $167/month

If that $167/month gave you reliable transportation, it was worth it. Compare to leasing (often $300-500/month) or buying new (much higher depreciation).

Special Cases

Classic cars: Eventually appreciate. A 1990s sports car hitting the floor might climb back up as it becomes collectible.

Desirable enthusiast cars: May skip the floor entirely. Clean examples command premiums.

Rare configurations: Manual transmissions, certain colors, and specific packages can hold value better.

Bottom Line

Every car hits a value floor eventually. Understanding where that floor is helps you:

1. Buy at the right time (after steepest depreciation)
2. Sell at the right time (before costly repairs)
3. Calculate true ownership cost (not just monthly payment)
4. Avoid overpaying for cars that crater

The goal isn’t to avoid depreciation—it’s to minimize it while getting the most use from the vehicle.