Choosing Your Next Car Color -- Could It Affect Resale Value?
Six years later, both colors are uncommon on the road, but I especially appreciate having chosen my car’s eye-searing shade of yellow because makes it easy to find in any parking lot.
Turns out, that color yellow has additional value!
According to a recent survey by ISeeCars.com, color also affects a car’s retained value. While the average car depreciated 29.8 percent over the first three years of ownership, orange and yellow color cars depreciated the least of any color – 27.4 percent and 26.2 percent less than the average car respectively, according to their analysis of 1.6 million vehicles. These colors topped the list for the least depreciation across virtually all body styles and market segments.
“One of the main contributing factors is supply and demand,” explained Phong Ly, CEO of iSeeCars.com. “The more unusual colors, such as orange, yellow, and green, are not as readily available (making up only 1.5 percent of all vehicles), yet they are popular with enough car buyers to create a demand that directly affects their resale value.”
In addition to scarcity, lower mileage on average is another factor in higher retained value for vehicles in these rarer colors. “Cars in orange, yellow, and to a lesser extent, green, are primarily sports cars and muscle cars,” said Ly. “Not only do these colors appeal to many of the buyers in these segments, but these cars are driven less, most likely because they are not used as daily drivers.
For example, the average mileage of three-year-old orange sports cars is just 27,210 miles, and 26,822 miles for muscle cars, compared to 36,324 miles on average for all cars,” he explained.
Surprisingly, cars in rare colors don't take much longer than the average vehicle to sell. Ly said, “The average three-year-old car takes 43.9 days to sell, while the average for orange cars is 44.1 days and 44.9 for green cars. Yellow cars take a bit longer to move, at 49.5 days, but they are not languishing on dealer’s lots.” In fact, cars of almost all colors (except beige) sell within six days of the average car.
Unexpectedly, popular car colors like black, white, and gray showed depreciation that was closer to the average car. “Because buyers shopping for such colors have a lot more choices, sellers may not have as much pricing power,” Ly commented.
Gold vehicles showed the worst depreciation of any color, at 33.5 percent over the first three years. The majority of gold cars are sedans, which have seen less demand in recent years. "We suspect that the lower popularity of sedans may be what's driving the depreciation of gold vehicles overall," mentioned Ly.
Consumers who will be turning in their leased cars or trading them in soon shouldn’t expect more than the average retained value. “But,” Ly said, “Consumers who have a car in orange, yellow, or green may be able to get more money for their cars, potentially adding to the down payment on their next car.”
iSeeCars.com analyzed over 1.6 million used three-year-old cars (model year 2013) of all colors sold between July 1, 2015 and June 30, 2016. Depreciation over three years was calculated by comparing the average listing price to the average MSRP (inflation adjusted) for each car color, as well as for each color and body style/market segment. Colors with fewer than 1000 cars, and colors and body styles/market segments with fewer than 30 cars were excluded from the analysis.
iSeeCars.com is an automotive data and research company that helps consumers find the best car deals by providing key insights and guidance. Based in the Boston area, iSeeCars.com was founded by former TripAdvisor and SAP developers and executives determined to improve the car shopping experience for consumers.