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Not sure if this is the right area for the question but I am buying a new Honda Accord 2014 EX-L V6 2014 model.

Does the value of the car depreciate because it is last year's model, even though it has not been used? This year's model is 2015 which will become old in 4 months.

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    Every car depreciates in value, unless it's an antique which has collector value. A brand-new car arguably loses a large percentage of its value the moment it leaves the dealer's lot. Whether you can claim that depreciation for tax or business purposes depends on exactly what the vehicle is being used for. – keshlam Dec 17 '14 at 20:19
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    Don't buy a new car...Best financial advice I'm qualified to give you. – Chris Pfohl Dec 17 '14 at 20:31
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Accounting principles aside, the way to think about depreciation is to ask "what could I sell it for?". The depreciation over a year is the difference between wht it's worth now and what it is worth in a year. Taking cars as an example, on the day you drive it off the dealer's lot it becomes a used car, and is worth less than a new car, so it depreciates quite a bit.

Assuming you are asking 'will my 2014 car be worth less in a year's time than a 2015 model bought at the same time', the answer is probably yes (unless it turns out that everyone hates the 2015 model). On the other hand, you should be able to get the 2014 model for less than the 2015 model; so the 2014 model may have depreciated less.

From the dealer's point of view the car has depreciated, since he bought it assuming it could be sold for the full price of a 2014 model, and now he is going to have to sell it at a discount.

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    One fall I asked a Toyota salesman if they were going to sell the old year's models at a cheaper price, since the new year models were out, and the old ones were 1 year old & worth less even though they were still "unsold." He said "No, they're still new." I walked out. – Xen2050 Dec 18 '14 at 16:44
  • Auto makers keep making cars through the year, so the 'old model' cars were almost certainly not one year old, and they are still unused. What the salesman meant was "I'm confident I can sell these cars for the full price". Your walking out won't have worried him in the slightest. – DJClayworth Mar 4 '17 at 16:59
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The loss of value is actually an indirect loss. In x years when you are trying to sell the car the potential buyers will equate the model year to age of the car.

Imagine this scenario. In December 2014 you purchase a 2014 model year vehicle. 24 months later in December 2016 you go to sell it. Potential buyers see cars the following way:

  • 2017: new
  • 2016: 1 year old
  • 2015: 2 years old
  • 2014: 3 years old.

While you theoretically will have fewer miles than the other 2014 cars, they will price the car in the same range as all the other 2014's. Your loss is the difference between the 2014 and the 2015 cars.

If your plan is to keep the car until it falls apart this might not be a big deal.

Today you should be buying the car for less than the current model years on the lot. You should also be able to negotiate a better price because they just want to get it out of their lot.

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The car hasn't depreciated in value yet since it's new. However, the market value of the car might have decreased since the car is soon to be last year's model. Once you drive the car out of the lot, the car will depreciate against the market adjusted price of your car.

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  • IF the dealer owns the car, market value decrease is depreciation for him. If they merely hold the car for the manufacturer, then the manufacturer sees the depreciation. – Xalorous Mar 3 '17 at 22:42
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Cars wear out over time even if they aren't used - the rubber gets harder, fluids will age, even the paint is likely to have been worn by the weather. The date the car was manufactured will let you know the details of this more precisely, however not too many people look at it. In reality the difference between a Dec 31st car and a Jan 1st car is next to nothing, but people tend to just look at the year - therefore even if there isn't much physical difference, it will be harder to convince others of the same thing, and they will be willing to pay less for it, therefore it is effectively worth less (even if the dealer won't sell it for less..)

this is assuming that there aren't any actual changes as far as a refresh between these years, which could make it go either way.

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I ran the numbers on KBB.com on more or less the car from above - you can see the difference markedly. This is the 'private sale' price in 'good' condition, about 3 years after the (2015) car came out.

This is for a Accord LX 4 Door Sedan with 33k miles (average 2015 miles).

2015: $15,260
2014: $13,603
2013: $12,568
2012: $11,018

Over $1600 difference 2015 vs 2014. 2013 has another $1000 off and 2012 another $1500.

Just to show a different car, here's a Subaru Forester, 35k miles (average 2015 miles), base model, "Good", private party. (This model would've been around $22k new., very similar to Accord pricing - new 2017 models are almost identicla in price between the two.)

2015: $17,139
2014: $16,252
2013: $15,667
2012: $14,731

That holds up a bit better, but still is losing close to $1k per model year for the same mileage. The Forester is one of the best "holds its value" brands for the 2010-2015 period, hence the slower decline, but you can still see a marked decline.

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