https://diminishedvalueofgeorgia.com/wp-content/uploads/2025-Car-Value-Depreciation-Overview.pdf
Report Summary
The auto market is shifting away from the unusual trends of the past few years. While vehicle values are still strong, normal depreciation is returning. This report breaks down what happened, what to expect in 2025, and how you can protect your car’s value. We’ll look at real data to show which cars hold their value best and explain key market forces in simple terms.
The Story of Car Value: A Look Back at Recent Years
To understand where car values are heading, we first need to see where they’ve been. The last few years were a roller coaster for the auto industry. A shortage of computer chips meant fewer new cars were made, which caused the price of used cars to skyrocket.
In 2021, something happened that we’ve never seen before: used cars actually went UP in value. As you can see in the chart below, the average car didn’t depreciate—it appreciated by over 28%! Since then, the market has been slowly returning to normal, with values dropping in 2022, 2023, and 2024. This drop isn’t a crash; it’s a correction back to normal depreciation patterns.
Historical Used Vehicle Depreciation (2-6 Year Old Vehicles)
2024 Market in Review: Not All Cars Are Created Equal
In 2024, the average vehicle depreciated by -12.5%. However, the type of vehicle you own makes a huge difference. As manufacturers caught up on production, some vehicle segments saw their values drop faster than others.
Work vehicles like Full-Size Vans, which were in high demand during the pandemic, saw the steepest declines. In contrast, popular segments like Small Pickups held their value remarkably well. This data shows why choosing the right type of vehicle is the first step in fighting depreciation.
2024 Depreciation Rates by Vehicle Segment
An accident can drastically change these numbers. Even after perfect repairs, a vehicle’s history report will show it has been in a wreck, causing its market value to drop permanently. This loss is known as **Diminished Value**. If the accident wasn’t your fault, you are entitled to claim this loss from the at-fault party’s insurance. Services like Diminished Value of Georgia and Diminished Value Carolina specialize in appraising and proving this specific loss.
Understanding the “Retention Index”: A Measure of Value
How do experts measure the overall strength of the used car market? They use a tool called the **Used Vehicle Retention Index**. This isn’t as complicated as it sounds. It simply measures the average wholesale value of a used car as a percentage of its original price (MSRP). A higher index number means cars are holding their value better.
The chart below shows how this index soared to record highs in 2022 and has been gradually coming down. While it’s declining, it’s still significantly higher than it was before the pandemic, which shows that used car values remain historically strong.
Black Book Used Vehicle Retention Index (2-6 Year Old Vehicles)
Key Market Forces & 2025 Forecast
Several key factors will continue to influence car values in 2025:
- Interest Rates: High interest rates make it more expensive to get a car loan, which can reduce demand for both new and used vehicles.
- Leasing: Fewer cars were leased from 2020-2022. This means fewer 3-year-old cars will be returned to the market in 2023-2025, keeping the supply of late-model used cars low and supporting their prices.
- Electric Vehicles (BEVs): The BEV market is still volatile. Concerns about charging infrastructure and rapidly changing technology are causing them to depreciate faster than many gasoline cars.
- Economic Uncertainty: If the economy slows, people may put off buying a car, which could cause prices to drop further.
If your vehicle is severely damaged, an insurer may declare it a total loss. Understanding these market forces is crucial for ensuring you get a fair settlement based on your vehicle’s true market value.
Full 2024 Depreciation Data by Segment
For a more detailed look, this table provides the full breakdown of depreciation rates across all major vehicle categories for the 2024 calendar year.
| Vehicle Segment | Full Year 2024 Depreciation |
|---|---|
| Full-Size Van | -19.8% |
| Prestige Luxury Car | -19.2% |
| Luxury Car | -18.0% |
| Compact Luxury Crossover/SUV | -15.7% |
| Full-Size Luxury Crossover/SUV | -16.5% |
| All Vehicles (Average) | -12.5% |
| Mid-Size Crossover/SUV | -12.0% |
| Full-Size Pickup | -11.7% |
| Mid-Size Car | -9.4% |
| Small Pickup | -8.9% |
| Sporty Car | -6.6% |
| Full-Size Car | -6.3% |
| Compact Car | -5.8% |
Conclusion: What This Means For You
While you can’t control the global economy, you can make smart decisions to protect your investment. Understanding that a Small Pickup holds its value twice as well as a Luxury Car is powerful knowledge. Keeping your car in excellent condition and maintaining detailed service records are your best defenses against depreciation.
Navigating the world of vehicle value, especially after an accident, can be challenging. The entire process involves complex claim logistics. By staying informed, you empower yourself to make better financial choices and ensure you are treated fairly in any situation.
