How Depreciation Works on Indian Cars, Year by Year
A realistic year-by-year breakdown of how Indian passenger cars typically depreciate.
4 min read · Updated 14 Oct 2026
Key Takeaways
- A new car typically loses 15-20% of its value within the first year — this is the single steepest depreciation point in a car's life, driven partly by the simple fact of no longer being "new."
- After year one, depreciation commonly settles into a steadier pace of roughly 8-12% per year, meaning a car might retain somewhere in the range of 50-60% of its original value by the end of year five — figures vary meaningfully by brand, model and condition
- The rate of depreciation typically slows further in this stretch, as the car has already shed most of its "newness" premium — condition, mileage and documented maintenance start to matter more than age alone in determining value at this stage
Understanding the shape of the depreciation curve helps both buyers find the sweet spot and sellers set realistic expectations.
On This Page
1. Year One: The Steepest Drop
A new car typically loses 15-20% of its value within the first year — this is the single steepest depreciation point in a car's life, driven partly by the simple fact of no longer being "new."
2. Years Two Through Five: Steady Decline
After year one, depreciation commonly settles into a steadier pace of roughly 8-12% per year, meaning a car might retain somewhere in the range of 50-60% of its original value by the end of year five — figures vary meaningfully by brand, model and condition.
3. Years Five to Ten: Depreciation Slows
The rate of depreciation typically slows further in this stretch, as the car has already shed most of its "newness" premium — condition, mileage and documented maintenance start to matter more than age alone in determining value at this stage.
4. Brand and Model Significantly Affect the Curve
Strong resale brands (Maruti Suzuki, Toyota, and certain Hyundai models among them) depreciate more slowly than the general curve suggests, while some other models depreciate faster — always check real current local listings for your specific car rather than relying purely on a generic curve.
Frequently Asked Questions
Is the 1-2 year mark genuinely the best value point to buy used?
It is a commonly cited sweet spot, since the steepest depreciation has already occurred while the car retains most of its useful life — though the "best" point varies by your specific priorities.
Do luxury cars depreciate faster than mainstream brands?
Generally yes, often more steeply in the first few years, which is part of why used luxury cars can represent strong relative value, as covered in our luxury car buying guide.
Does low mileage slow depreciation meaningfully?
Yes — mileage is one of the clearest adjustors to the base depreciation curve, alongside condition and documentation.