How do I know when a car is losing value too fast?

When you sit in the driver’s seat and inhale that familiar new car smell, few people stop to think about how much that vehicle will be worth three years down the line. But the truth is, depreciation is the single biggest cost of car ownership. Some cars can still fetch a good price after a few years, while others lead to significant financial losses. From a global perspective, we’ve outlined the key indicators to help you determine if a car depreciates too quickly.

What is Depreciation, and Why Does it Matter?

Simply put, depreciation is the difference between what you pay for a car and what you sell it for. For example, if you buy a new car in the United States for $30,000 and can only sell it for $15,000 five years later, you’ve lost $15,000.

Depreciation directly impacts your wallet. It’s more expensive than fuel costs and harder to predict than insurance. Choosing a car with high resale value is like putting insurance on your future wealth.

How to Tell if a Car Depreciates Too Quickly?

Based on market data from the United States, Europe, and Southeast Asia, we’ve summarized the following criteria. The more conditions a car meets, the faster it likely depreciates.

1. How Big Are the Discounts on New Cars?

If a car is heavily discounted shortly after its launch, its price in the used market will inevitably collapse. For instance, in the US market, certain sedans see massive discounts during year-end clearance events, which directly pulls down the prices of the same used models.

Conversely, some models maintain strong prices due to high demand and short supply. In the UK market, the Range Rover has even seen used car prices exceed the original new car price, a phenomenon known as price inversion.

2. What is the Brand’s Reputation?

Brand influence varies across the globe. In North American and European markets, Maserati and Jaguar tend to depreciate faster. Using US data as an example, the Jaguar F-PACE is among the models with the highest five-year depreciation rates.

On the other hand, the Porsche 911 is a global benchmark for high resale value. In Japan and Australia, the Toyota Land Cruiser also holds its value exceptionally well, often commanding high prices even after ten years.

3. Have You Chosen the Right Powertrain Type?

Whether you choose pure electric, hybrid, or fuel-powered directly influences the price you’ll get when selling the car in the future.

Pure electric vehicles face significant challenges. US data shows that pure electric cars depreciate by an average of 58.8% after five years. Take the Mercedes-Benz EQS, for example. Its new car price in the US exceeds $150,000, but the average price for a one-year-old used model is only $71,000 – a loss of nearly half its value. Rapid technological advancements are the main reason.

Meanwhile, hybrids and pickups perform admirably. In markets like Australia and the US, hybrids and pickups have a five-year depreciation rate of only 40.4%, significantly lower than the industry average of 45.6%.

4. What About Mileage and Overall Condition?

Even for the same car model, price differences can reach up to 50% based on condition. A luxury sedan that has covered 200,000 kilometers on Germany’s Autobahn will have a much lower residual value than a comparable vehicle used solely for city commuting.

Extreme climates also affect a car’s condition. In cold regions like Canada, road salt used for snow melting can corrode the undercarriage, directly impacting the offers from used car dealers.

5. Are After-Sales Service and Spare Parts Readily Available?

If a brand withdraws from a market, or if parts become difficult to find, used car prices can plummet immediately. The Chevrolet Bolt EV might fare reasonably well in North America, but when exported to the Middle East, its residual value for a three-year-old model plummets to 28% due to the lack of a supporting service network.

Toyota enjoys high resale value globally precisely because its parts are ubiquitous and can be repaired at almost any local garage.

6. What is the Market Supply and Demand Situation?

If the supply of new cars suddenly surges, used car prices will drop sharply. In 2025, the global classic car market saw a general price decline of 10% following a 9.7% increase in supply.

What are the Characteristics of the Cambodian Market?

When we shift our focus to Southeast Asia, particularly Cambodia, we find that the car market operates on its own unique logic.

In Cambodia, high import tariffs drive up the prices of new vehicles. This, in turn, creates a greater price advantage for used cars, especially right-hand drive vehicles imported from Japan. In Phnom Penh’s used car market, pickups and SUVs are popular choices. The Toyota Hilux and Fortuner, due to their suitability for local road conditions, depreciate much slower than luxury sedans from Europe or America.

If you are browsing car for sale in cambodia, you’ll notice some interesting phenomena: some cars that depreciate quickly in Europe or America might hold their value here due to scarcity, and vice versa. In terms of pricing in Cambodia, a used Toyota Vios typically ranges between $8,000 and $12,000 USD, while a used Toyota Fortuner falls between $15,000 and $20,000 USD. This reflects the local market’s preference for durability and practicality.

Conclusion

To determine whether a car depreciates too quickly, you need to consider factors like brand reputation, technological maturity, parts availability, and local market demand. In the current market environment, while pure electric vehicles are novel, they may not be the best choice for preserving value right now. Classic fuel-powered cars, pickups, and hybrid models remain reliable guardians of value on a global scale.

Whether you are shopping for a used car in the United States or browsing car for sale in cambodia, remember this: buying a car is not just about the immediate driving experience; it’s also about achieving a desirable selling price in the future. Do your homework, choose models that stand the test of time, and make your asset retain its value for longer.