Depreciation Curve (Residual Value)

Category: finance

The rate at which a car brand’s vehicles lose market value over their first five years of ownership.

Resale value is a primary benchmark of brand health. A brand with high residual value—meaning its cars depreciate slowly—commands lower lease payments and higher confidence from new buyers, as the vehicle maintains its value as a secondary market asset.

Common Examples

• The brand’s reputation for iron-clad reliability ensures a shallow depreciation curve, keeping resale value high even after five years of ownership.
• Comparing the projected five-year residual value is essential when choosing between a lease and a loan for a new car purchase.