Deprecation

[babbles]

So I have a 2019 new honda civic paid 24k out the door.  Found a pretty decent depreciation scale that says a car depreciates 9% off the lot in 1 min and 10% after one year,  so does the depreciation come off of what you paid for it or what the car's invoice or MSRP is?  I've been making  triple payments anyway but just curious to see what others feel about auto depreciation, namely for Hondas.  

I used KBB , Vroom, carvana, and  TMV  do a trade in value and the highest bidder was Vroom @ $19500 which means based on what I paid out the door the vehicle has lost about 20% value with a payoff of 21k.  Crazy!

Thanks.

[Brian_Earl_Spilner]

It depends on the car. When I was at Chase, one of our worst was land and range rovers. A lot were 50% what a brand new one was a year later.

[pinkandgrey]

Well, I can't comment on how much any one particular car depreciates, but I will say the depreciation amount will not change the price/balance of the loan. That would be so nice though! Lol

[Anonymous]

depends on make model and trim level.

yes the first minute will be the biggest shocker, but after it subsides a bit.

honda toyota will have less loss than most others.

Dont worry about unless you need to sell.

[ridgebackpilot]

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@babbles wrote:

I used KBB , Vroom, carvana, and  TMV  do a trade in value and the highest bidder was Vroom @ $19500 which means based on what I paid out the door the vehicle has lost about 20% value with a payoff of 21k.  Crazy!

Thanks.

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This is why gap insurance was invented! If you total your car, your insurance company will only pay what the car is worth at the time. If you owe more than that, you'll have to eat the difference. Gap insurance reimburses you for the difference.

Many people who forego purchasing gap insurance (it's not expensive) live to regret that decision when their insurance company declares their new car a total loss...

[Revelate]

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@ridgebackpilot wrote:

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@babbles wrote:

I used KBB , Vroom, carvana, and  TMV  do a trade in value and the highest bidder was Vroom @ $19500 which means based on what I paid out the door the vehicle has lost about 20% value with a payoff of 21k.  Crazy!

Thanks.

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This is why gap insurance was invented! If you total your car, your insurance company will only pay what the car is worth at the time. If you owe more than that, you'll have to eat the difference. Gap insurance reimburses you for the difference.

Many people who forego purchasing gap insurance (it's not expensive) live to regret that decision when their insurance company declares their new car a total loss...

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On the flipside it's not expensive because it doesn't get triggered very often. Like any insurance decision there's some amount of gambling involved though that's probably not the best description.

Toyota and Honda traditionally have flatter depreciation curves (more linear to be technical); they hold their value better over the first several years compared to some other manufacturers, I do wonder if that's starting to change though.

[babbles]

I  take it the slow down in the economy also has  an affect on  vehicles depreciation, 

[dragontears]

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@babbles wrote:

I  take it the slow down in the economy also has  an affect on  vehicles depreciation, 

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Are you thinking it decreases or increases the rate of depreciation? 

[babbles]

sorry decreases, my brand new honda civic has decreased 2k from  2 wks ago,  I resubmitted an appraisal through carvana,  kbb, and tmv and have paid my  vehicle down to what I thought the going value was which was $19,500 then and now is17k  so the vehicle has lost  just about 30%  value since I bought it late Jan 2020 with 2300 miles

[dragontears]

Terminology clarification:

Increase in depreciation Rate: car is worth less faster

Decrease in depreciation Rate: car retains value better 

I imagine a slower economy will cause depreciation at a faster rate.