Depreciation is one of the highest costs of owning a car, but it is often overlooked until the owner decides to sell.
A vehicle may be reliable, comfortable and affordable to run while still losing a large percentage of its original purchase price. New-car discounts, changing technology, buyer demand, brand reputation and the supply of similar used vehicles can all affect its resale value.
The original version of this guide focused on models such as the MG ZS, Mazda CX-5 and Tesla Model Y. However, a permanent ranking based on older figures can quickly become misleading as manufacturers adjust prices and market conditions change.
Instead, this updated guide examines the cars and vehicle categories facing the greatest depreciation pressure in Australia, supported by 2026 market data.
Car Depreciation Formula
Car depreciation is the difference between what a vehicle originally cost and what it is worth today.
You can estimate it using this formula:
Depreciation percentage = Original price − current value ÷ original price × 100
For example, a vehicle originally purchased for $60,000 and now valued at $36,000 has lost $24,000, or 40% of its original value.
The biggest decline commonly occurs during the first few years of ownership. A new vehicle may lose approximately 10% to 15% of its value shortly after purchase, followed by another significant decline during its first year. The rate normally slows as the vehicle becomes older.
However, average depreciation figures do not tell the whole story. Some models retain most of their original price, while others can lose more than half their value within several years.
Australia’s Car Depreciation Market in 2026
Australia’s used-car market became more competitive during the first half of 2026.
AADA and AutoGrab reported 1,300,018 used-vehicle sales during the first six months of the year, down 6.6% from the same period in 2025. Supply increased while sales softened, giving buyers greater choice and more negotiating power.
By June, more than half of the one-to-five-year-old vehicles sold had received an asking-price reduction. The average discount reached 3.7%, the largest recorded during the first half of the year.
This does not mean every used car is falling sharply in value. Hybrids remained comparatively resilient, while certain utes, small passenger cars, performance vehicles and popular SUVs continued to attract strong demand.
The greatest depreciation risk remains concentrated around vehicles affected by rapid technology changes, frequent new-car discounts, expensive ownership costs or limited second-hand demand.
Which Cars Depreciate the Most in Australia?
There is no single permanent ranking of the most depreciated cars in Australia. Values vary by model year, variant, kilometres, condition, location and the price originally paid.
However, the following vehicles and categories currently face some of the strongest resale pressure.
1. Early Luxury Electric Vehicles
Early premium EVs can experience particularly steep depreciation.
The Jaguar I-PACE has been identified as one of the strongest examples, with some vehicles reportedly losing around 75% of their value over five years. Earlier Nissan Leaf models have also faced resale pressure as buyers compare their range, charging capability and battery technology with newer electric cars.
These vehicles may now appear attractive to used-car buyers, but their original owners absorbed much of the depreciation.
The decline is not necessarily caused by the vehicles becoming unusable. Newer EVs often offer longer range, updated software, faster charging and lower new-car prices. This makes older models harder to price against their modern replacements.
2. Tesla Model 3 and Model Y
Tesla vehicles remain popular in the second-hand EV market, but their values have been affected by new-car price changes and growing competition.
A 2026 market analysis reported that some near-new Tesla Model Y vehicles had lost close to half their original value.
However, depreciation should not be confused with a complete lack of demand. In February 2026, the Tesla Model 3 and Model Y were the two highest-selling used EV models recorded by AADA and AutoGrab. Model 3 sales increased 19% from the previous month, while Model Y sales increased 28.7%.
This means a Tesla can sell relatively well while still being worth considerably less than its original purchase price.
Factors influencing used Tesla values include:
- Reductions or changes to new-car pricing
- Updated versions entering the market
- Increasing competition from Chinese and established manufacturers
- Differences in battery, range and equipment between model years
- A larger supply of ex-fleet and novated-lease vehicles
3. Older Electric Cars
The broader used-EV category continues to show lower retained values than many petrol, hybrid and high-demand utility vehicles.
AADA defines retained value as the vehicle’s sale price compared with its original recommended retail price.
In February 2026, its national EV data showed average retained values of:
| Model year | Average retained value | Approximate value lost |
|---|---|---|
| 2025 | 93.7% | 6.3% |
| 2024 | 75.4% | 24.6% |
| 2023 | 60.8% | 39.2% |
| 2022 | 54.5% | 45.5% |
| 2021 | 48.9% | 51.1% |
| 2020 | 40.9% | 59.1% |
These are averages across used EVs rather than depreciation figures for one specific model. Nevertheless, they demonstrate how strongly age can affect electric-car resale values.
The picture is also changing quickly. Used EV sales increased 54.6% year on year during the first half of 2026, while their average selling time fell from more than 60 days in January to fewer than 40 days in June.
Used EVs are therefore attracting more buyers, even though many older examples have already experienced substantial depreciation.
4. Large Luxury Sedans
High-end sedans have historically been among the fastest-depreciating cars.
Vehicles such as the BMW 7 Series, Mercedes-Benz S-Class and Audi A6 can lose a large amount of value because they begin with high purchase prices but attract a smaller group of second-hand buyers.
As they age, buyers must also consider expensive tyres, servicing, electronics, air suspension and out-of-warranty repairs. Some luxury sedans have historically lost between 50% and 70% of their original value within five years.
A three-year-old luxury sedan can therefore look surprisingly affordable compared with its original price. The lower purchase price, however, does not necessarily mean lower ownership costs.
5. Premium SUVs With High Running Costs
Electric cars receive most of the attention, but they are not the only vehicles experiencing weak retained values.
RedBook analysis found that premium SUVs had experienced a steeper and more prolonged reduction in retained value than battery-electric vehicles during part of the used-market correction.
Large luxury SUVs may lose value quickly when they combine:
- A high original purchase price
- Expensive servicing and replacement parts
- High fuel consumption
- Complex technology
- Limited demand outside major cities
- Concerns about repair costs after the warranty expires
Brand alone does not determine depreciation. Some premium SUVs, including particular Porsche Macan and Land Rover Defender variants, have shown strong retained values. Exact model, age and specification matter more than the badge.
6. Cars Undercut by New-Car Discounts
A used vehicle’s value is heavily influenced by the current price of the equivalent new model.
When a manufacturer reduces its drive-away price, offers large factory bonuses or releases a better-equipped replacement at a similar price, used examples must usually become cheaper too.
This risk is especially relevant in rapidly changing segments such as affordable EVs and compact SUVs.
The MG ZS was identified in a 2024 comparison as one of Australia’s weakest vehicles for immediate resale value, with an estimated 15% decline after purchase.
That result should not be treated as a permanent 2026 ranking. However, it illustrates the resale risk when a model competes mainly on price and newer alternatives continue entering the market.
Why Some Cars Lose Value Faster
Several factors commonly appear among the most depreciated cars in Australia.
Rapid technology changes
New infotainment systems, safety features, batteries and charging technology can make a relatively recent vehicle appear outdated.
Frequent new-car price reductions
A used car cannot remain priced close to a new vehicle if the manufacturer reduces the new-car price.
Limited second-hand demand
Unusual body styles, discontinued models and low-volume brands may take longer to sell because fewer buyers are searching for them.
High ownership costs
Expensive servicing, tyres, insurance, fuel or potential repairs can reduce what buyers are willing to pay.
Oversupply
When many similar vehicles are listed at the same time, sellers must compete through price, presentation or vehicle condition.
Weak service or dealer support
Buyers may discount vehicles when they are uncertain about parts availability, servicing networks or the brand’s long-term presence in Australia.
Does High Depreciation Make a Car a Bad Purchase?
Not necessarily.
High depreciation can create opportunities for used-car buyers. A two-to-four-year-old vehicle may offer modern safety equipment and low kilometres at a much lower price than when it was new.
The important question is whether the saving compensates for the vehicle’s running costs, warranty position and future resale risk.
For new-car buyers, high depreciation matters more when they plan to sell within three or four years. Someone keeping the vehicle for ten years may be less affected by short-term market movements.
How to Reduce the Impact of Depreciation
You cannot stop a car from depreciating, but you can protect its resale value.
Maintain the vehicle according to the manufacturer’s schedule and keep the complete service history. Repair visible damage, retain both keys and avoid modifications that reduce the number of potential buyers.
Timing also matters. Selling before a major model replacement, warranty expiry or large increase in kilometres may improve the result.
Most importantly, compare your expectations with current market evidence. Advertised prices do not always represent completed sale prices, and the amount originally paid does not determine what a buyer will offer today.
Is It Time to Sell Your Car?
Cars affected by rapid price changes can become harder to value. Waiting may produce a better result, but it may also expose the owner to another model update, manufacturer discount or increase in used supply.
Before making a decision, review comparable vehicles with the same model year, variant, kilometres and condition.
Skip The Dealer can provide a market-based valuation based on your vehicle’s current details. This can help you understand its realistic selling position without relying only on advertised prices.
The most depreciated cars in Australia will continue to change. The best protection is to understand current demand, maintain the vehicle carefully and make the selling decision using today’s market—not the price paid several years ago.