Explained

Depreciation vs. Resale Value: What's the Difference?

'Depreciation' and 'resale value' get used interchangeably, but they describe the same thing from opposite ends. Understanding the relationship makes every price comparison clearer.

Think of a car's original price as a full tank. Depreciation is how much has drained away; resale value is how much is left. If a $40,000 car is worth $24,000 after five years, it has depreciated 40% and retained 60% of its value. Same fact, two framings.

The one number that ties them together

Value retention is the bridge: retained value = 100% − depreciation. We express this as a resale score — the share of original value a model keeps after five years. Across the models we rank, the typical car retains about 68% of its value at five years (a 32% loss), but the spread between the best and worst is wide. A higher resale score always means slower depreciation.

Why the distinction matters when you buy

As a buyer, depreciation is your friend: it is the discount you inherit by purchasing used. A model that depreciates quickly can be a genuine bargain a few years in — you just want to avoid being the owner who takes that loss. That is why the two useful questions are “how fast does this depreciate?” and “where on the curve am I buying?”

Why it matters when you sell

As a seller, resale value is what you actually collect. A car that held its value protects your money; one that depreciated hard means a smaller cheque. Knowing your model's curve tells you whether to sell now or whether waiting will cost you more in value than it saves you in use.

How to use both

Start from the resale rankings to see which models depreciate slowly, then open a model to read its year-by-year curve. To put dollars on it for a specific price, use the depreciation calculator.

Frequently Asked Questions

Is high resale value the same as low depreciation?

Yes — they are two ways of describing the same thing. Resale value is the price a used car holds; depreciation is the value it has lost. A car with high resale value is, by definition, one that has depreciated slowly.

How is resale value calculated?

We measure it from real used-car listings: each asking price is normalized to a standard mileage for the car's age, adjusted from asking to likely sale price, and compared with the vehicle's original MSRP. We then read the value retained at a fixed five-year horizon so models can be compared fairly.

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