Why New Cars Lose Value so Quickly

We have all heard the saying that the second you drive it off the lot you lose x amount of dollars on your new car, here is why.

Contemplating buying a new car? The unfortunate downside of the experience is not the sales rep’s hackneyed opening lines or the stale showroom coffee, but the financial hit you’ll take the moment you drive your new pride and joy off the lot.

Wise consumers know the biggest expense of a new car is depreciation — that pecuniary penance that devalues your new ride as soon as you sign the ownership papers. One U.S. consumer website estimates buyers lose an average 11 per cent of their new car’s value while the ink is drying. After just two years, one-third of the purchase price has evaporated into thin air — that’s $10,000 of a $30,000 purchase.

Read the full story here.