Depreciation is the largest single cost of owning a car — bigger than fuel, insurance or servicing for most people. Understanding which cars hold value is as important as the purchase price itself.
The Depreciation Curve
Most cars lose 15–25% of their value in the first year, and up to 50–60% in the first three years. After that, the curve flattens. This is why buying a 3-year-old car from the original owner is often the sweet spot — someone else has absorbed the steepest depreciation.
Categories That Hold Value Well
- Toyota LandCruiser: Consistently the strongest depreciation performance in Australia. Demand always outstrips supply.
- Toyota HiLux & Ford Ranger: Australia's best-selling vehicles for years. Ute demand is consistently strong.
- Subaru Outback / Forester: Strong resale driven by reliability reputation and AWD demand.
- Luxury brands (Porsche, Mercedes-Benz AMG): Specific models hold value exceptionally well, particularly low-kilometre examples.
Categories That Depreciate Quickly
- Luxury sedans from European brands: High ownership costs lead to soft resale.
- Large domestic sedans: No longer in production in Australia; parts availability concerns suppress demand.
- Budget city cars: High supply, low demand from serious buyers.
- Early-generation EVs: Rapid technology improvement means older EVs face accelerated depreciation.
How to Use Depreciation to Your Advantage
If you're buying: let someone else take the first-year hit. A 12-month-old car from a private seller is often $5,000–$10,000 cheaper than the same car new.
If you're selling: sell before the 3-year mark if your car is in a high-depreciation category. After that, the rate slows but so does buyer interest.
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