The difference isn't just a few dollars, either. Yellow cars depreciate 26.2 percent on average from their original MSRP over 5 years (adjusted for inflation), compared to 34.4 percent for a black vehicle. For example, for a typical $40,000 model, with all else being equal except for color, the yellow one loses $10,480 of its value over the half decade, and the black one drops $13,760 from its initial purchase price.
iSeeCars.com CEO Phong Ly speculates that the difference may be down to simple supply and demand. With new vehicles, the price of different colors is all about the same (unless you opt for a special paint), but the used market can more freely adjust price depending on the variables. Ly claims that only 1.1 percent of the cars on the road are yellow or orange. Therefore, it makes some sense that there's a premium for them over more common colors.
The study asserts that the results are true regardless of vehicle type. So if you're really trying to maximize your purchase and don't mind being a little bit different on the road, it might be worth considering a rarer color for your next purchase. Scroll down to read more about the study and see a full table of the shades by depreciation.
June 16, 2014
Woburn, Mass. (June 16, 2014) – Contrary to conventional wisdom, iSeeCars.com's study shows less popular car colors such as yellow and orange have lower depreciation than the most popular colors like silver and black. Yellow color cars show the least depreciation at an average of about 26% over 5 years from original MSRP (adjusted for inflation) while black has the highest at about 35%. For a vehicle with an MSRP of $20,000, that means on average, a yellow color one could be worth $1500 more at year 5 than the average car with average depreciation.
Over 5 Years
|Beige, Brown, Gold||
"While a popular car color like black or silver may get more interest and sell faster, our analysis indicates it may not get as high a value as a car, say, in yellow," Phong Ly, CEO and co-founder of iSeeCars.com said. "Scarcity may account for the difference - only 1.1% of all cars are yellow and orange; if teal and green are included, the percentage still goes up to just 5%. The dearth of supply of such colors may drive prices up."
iSeeCars.com analyzed over 20 million used cars of all different colors from model year 1981 to 2010. The depreciation was calculated for each car and color based on its original MSRP (adjusted for inflation), its used car listing price, and the age of the vehicle.
The lower depreciation of less common colors is seen across all car types including convertibles, coupes, sedans, SUVs, pickup trucks and wagons. For example, amongst SUVs, yellow color ones on average show the lowest depreciation. Amongst convertibles, teal adorned ones depreciate the least.
As for more common colors like black, silver, or gray, the depreciation is closer to the overall average depreciation for a car of about 34% over 5 years.
iSeeCars.com analyzed over 20 million used cars for sale last year and studied vehicles of all colors from 1981 to 2010. The depreciation for each vehicle was calculated based on the price of the used car, the original MSRP (adjusted for inflation), and age of the vehicle. Cars of the same color were then aggregated to determine the average depreciation over 5 years for each color. Inflation data from the Bureau of Labor Statistics were used in adjusting MSRP.
iSeeCars is a car search engine that helps consumers find the best deal by providing key insights and analysis about each used car. The proprietary iSeeCars algorithm ranks cars by calculating an overall score based on analysis of the car's condition, history, negotiability, price and the seller. Based in the Boston area, iSeeCars was founded by former TripAdvisor and SAP developers and executives determined to improve the used car shopping experience for consumers.