Color Rush: The Color Of Your Car Affects Its Depreciation Value
Yellow wins while gold loses outby Kirby, on
When you’re picking a color for your next car purchase, how much attention do you put into the color of the car? Whatever your answer is, it turns out that a car’s color goes a long way in affecting its depreciation value. This revealing information was presented by iSeeCars after the used car website analyzed over 2.1 million used car sales and discovered that certain car colors retained more of their value compared to others. Yellow, for example, was the big winner after the study revealed that cars wearing this color depreciated by just 27.0 percent in the first three years of ownership. On the other end of the spectrum? Gold, which depreciates by a staggering 37.1 percent in the same period.
The appeal of the color yellow in the auto industry appears to be tied to its availability, or lack thereof, according to eskers CEO Phong Ly. “Yellow cars are relatively less common, which could drive up demand and help maintain their value,” he said, before adding that the color also holds strong appeal among SUVs and pickup brands. Apparently, SUVs and pickup trucks depreciate 30.9 percent and 20.9 percent, respectively, overall, while yellow SUVs and pickups depreciate only 25.8 percent and 10.8 percent, respectively. Orange- and green-colored cars also revealed themselves to be more resistant to depreciation, depreciating by just 30.6 and 30.9 percent, respectively. The site also revealed that on average, cars depreciate in value by 33.1 percent in the first three years of ownership.
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Pay attention to the color of the car you choose next time you’re buying a brand-new ride
I’ll be the first to admit that I was actually surprised by the results of this study. All this time, I thought cars with monochromatic colors - white, black, and grey - held their values the most after three years. Color me surprised then to learn that flashy colors like yellow, orange, and green were the top three colors on that list. According to Ly, the large number of cars wearing these colors make them common enough that “buyers can shop around more easily if they’re interested in these colors, reducing the amount of pricing power for dealers.”
To be fair, the color white does sit in fourth place, though pretty far from the top three at 32.6 percent whereas red at 32.7 percent is the only other color that placed below the 33.1 percent average. Three colors - blue, brown, and grey - barely got above the average at 33.5 percent. They’re followed closely by black at 33.6 percent and from there, the last four colors to make up the list include silver (34 percent), beige (36.6 percent), purple (36.7 percent), and gold in the bottom at 37.1 percent.
It’s not a surprise that gold-colored cars have the worst depreciation rates in the auto industry. For one, the color isn’t for everyone, owing largely how attention-grabbing they can be. That attribute alone makes it a turn-off for a lot of car owners, especially those who are more subdued in their color preferences. According to Ly, the strong depreciation of gold-colored cars is also evident among SUVs (35.7 percent) and sedans (39.3 percent), where they have the worst and second worst-depreciation within their respective segments.
Average Three-Year Depreciation by Color
|Car Color||Average Depreciation Over 3 Years||% Difference Compared to the Average Car|
How long does a three-year-old car with a specific color stay on the market?
iSeeCars dug a little deeper to determine how long specific-colored, three-year old cars stay on the market and determined that car color and their respective retained values do not affect the time it takes to sell the car. Take yellow, for example. Despite being the color that has the smallest depreciation in the market, it actually takes an average of 41.5 days in the market before it sells. That’s second worst only to beige, which takes 46.6 days.
The fastest to sell among these cars is purple, which takes only 33.2 days on the market to sell. It’s followed closely by grey and gold at 34.2 days and 34.3 days, respectively, well below the average timetable of 36.5 days.
Average Days on Market for Three-Year-Old Cars by Color
|Color||Average Days on Market||% Difference Compared to Average|
What does this study tell us?
The iSeeCars study reveals a few important items to consider if you have a car that’s about to hit the second-hand market or if you’re actually looking to make a new car purchase. If you want to get the most out of your money, the colors to choose are yellow, orange, green, but if you want a car that’s going to sell quickly regardless of their depreciation value, purple and beige colors are the way to go.
It’s not exactly an exact science though because a lot of other factors need to be considered, including the the make and model of the car and its condition. But the study does reveal how understatedly important the color of a car is, especially if it’s one that’s about to hit the second-hand market.