A car’s color may seem irrelevant to its resale value, but car search engine iSeeCars.com’s new analysis of over 2.1 million used car sales found that retained value actually varies widely across car colors. While the average car depreciates 33.1 percent in the first three years of ownership, yellow cars hold their value the best and depreciate by only 27.0 percent. On the other hand, gold cars depreciate the most by 37.1 percent.
Average Three-Year Depreciation by Color
|Car Color||Average Depreciation Over 3 Years||% Difference Compared to the Average Car|
“Yellow cars are relatively less common, which could drive up demand and help maintain their value,” said Phong Ly, CEO of iSeeCars.com. “Our analysis shows that yellow vehicles have the lowest depreciation of any color for lower-volume cars like convertibles. Interestingly, yellow is also the color with the least depreciation for popular body styles like SUVs and pickup trucks.” SUVs and pickup trucks overall depreciate 30.9 percent and 20.9 percent, respectively, while yellow SUVs and pickups depreciate only 25.8 percent and 10.8 percent.
Orange and green cars also retain their value well and are also less common—together, yellow, orange, and green cars make up only 1.2 percent of all three-year-old cars. However, rarity alone does not determine how much a vehicle depreciates. The three worst colors—beige, purple, and gold—have a 0.7 percent share, but depreciate more than 10 percent worse than average. “Again, we find that this isn’t just due to the kinds of cars that tend to come in these colors,” explained Ly. For example, gold color cars make up only a 0.6 percent share of SUVs and a 0.5 percent share of sedans, but have the worst and second-worst depreciation within these segments, at 35.7 percent and 39.3 percent, respectively. “Across almost every bodystyle, gold color vehicles have some of the worst depreciation rates of any color,” noted Ly.
However, gold color cars are not just vehicles with high mileage. For example, coupes tend to have lower average mileage than the typical car, and depreciate 29.2 percent over the first three years. However, gold coupes depreciate 35.8 percent over the same period, a rate even greater than the overall average, despite averaging 25,023 miles while coupes overall average 29,337 miles. “We speculate that mileage alone can’t explain the color depreciation pattern, and that gold’s near-universally poor depreciation may reflect lower consumer demand for the color — given the choice, consumers may just prefer the more common colors or flashier colors,” Ly suggested.
The most common car colors—white, black, and gray—depreciated at a rate very close to average. Ly said, “Because these colors are so common, buyers can shop around more easily if they’re interested in these colors, reducing the amount of pricing power for dealers.”
Car color and retained value does not seem to affect the time it takes to sell the car. The average three-year-old car sells in 36.5 days. While yellow cars, which may be more expensive due to their higher retained values, take longer to sell (41.5 days, 13.8 percent longer than average), green cars sell in just 36.2 days, slightly shorter than average. On the other end, gold cars, which may be cheaper due to their higher depreciation, sell in 34.3 days, but beige cars sell in 46.6 days. Overall, almost all colors sell within six days of average.
Average Days on Market for Three-Year-Old Cars by Color
|Color||Average Days on Market||% Difference Compared to Average|
“Consumers considering purchasing a new car may want to look for something in yellow, orange, or green, because they’ll get more value if they sell their car after a few years,” advised Ly. “However, consumers looking for a used car may want to consider something in gold, purple, or beige, because those cars will have already taken a larger proportion of the depreciation hit.”
iSeeCars.com analyzed over 2.1 million used three-year-old cars (model year 2014) of all colors sold between September 2016 and August 2017. Depreciation over three years was calculated by comparing the average list price to the average MSRP (inflation-adjusted by 1.03, according to the U.S. Bureau of Labor Statistics) for each car. The data were then aggregated for each color, as well as for each color and bodystyle. Colors with fewer than 1000 cars were excluded from the analysis.
iSeeCars.com is a Boston-based car search engine that’s helped saved shoppers more than $125 million. It helps consumers find the best deals by providing key insights and guidance, using big data analytics powered by over 25 billion (and growing) data points and proprietary algorithms to objectively analyze, score and rank millions of cars and thousands of dealers.