Cars are expensive to buy and maintain, and in the vast majority of cases they are also rapidly depreciating assets. Attempting to minimize financial losses when considering a car purchase is tough; you need to consider the projected reliability to avoid overspending on repairs, and you need to consider the vehicle’s resale value. Many factors affect resale value including vehicle brand, transmission type, accident history, maintenance history, and the car’s interior color and exterior paint color. If you’re trying to minimize the sharp pang of depreciation, you will want to consider as many potential causes as possible, and that includes avoiding undesirable paint colors.
In a study performed by our friends at iseecars.com that compared pricing data for over 1.2 million three-year-old used cars, two cars of the exact same make and model in the exact same condition can vary in market value by as much as about 10% or about $5,000 on average just because of their paint colors. Some vehicle size categories have an even wider range between the highest valued exterior color and the lowest valued exterior color, so refer to the study results to verify the best colors in the vehicle category you’re considering.
It pays to be distinctive
Overall, according to the iseecars study, the paint colors that cause vehicles to lose their value the fastest are the boring and common colors like white, black, and gold. The idea that brightly colored cars lose their resale value faster was once common wisdom, but that is no longer the case. Gold, white and black cars–which account for the overwhelming majority of paint colors on new cars–lose over $15,000 over three years, while rarer and more distinctive colors like yellow, orange, and green lose between $9,951 and $13,667 over the course of those same three years. The study notes that used car depreciation is much higher than it was just a few years ago, and that paint colors do not affect resale value as much as they have in the past.
It boils down to good ol’ supply and demand. Manufacturers sell way more boring-colored cars than they do bright and distinctive colors, so there are significantly more of them available on the used market. Cars painted bright and fun colors are harder to find, and thus they go for higher prices. Again, these statistics vary by vehicle size category, so check out the other study findings to dig deeper into the market that you’re looking for. If you’re buying a new car, this may be the best evidence to encourage you to go for that exciting color rather than something more commonplace.
