Car Depreciation: The Biggest Hidden Cost for Drivers and How to Avoid It

Car depreciation costs Lithuanians more each year than fuel or insurance, yet almost no one calculates this expense. The moment you drive a new car out of the showroom, its value starts to drop — and over a few years, thousands of euros can simply melt away. The good news is that this mistake can be avoided if you understand how depreciation works and what the alternatives to buying are.

Car depreciation is the decline in a car's market value over time — that is, the difference between the amount you paid when buying it and the amount you'll get back when selling it.

In brief

• A new car loses about 20–30% of its value in the first year.
• Over the first 3–5 years, most new cars lose roughly half of their original price.
• A car worth €30,000 can "melt away" by €12,000–15,000 over five years.
• The depreciation risk can be transferred entirely to someone else — for example, by choosing a subscription instead of buying.

How much does a new car depreciate per year?

According to the European residual-value monitoring companies Autovista and Eurotax, the heaviest depreciation burden is borne by the first owner — it is specifically during the first years of use that a vehicle's value drops the fastest, and after the fourth or fifth year this process slows considerably. According to data from European car-value monitoring companies, most cars lose about 40–55% of their original value in the first three years.

The curve then flattens. After the fourth or fifth year, the value drops much more gently, so the same car bought when it's three years old depreciates significantly less than a new one. It is precisely because of this curve that the first owner takes on the heaviest financial share — and the second owner takes advantage of it.

Why is depreciation a car's biggest expense?

For many drivers, depreciation costs more than fuel, insurance, and servicing combined — only this expense is invisible until the time comes to sell. Unlike a full tank of fuel, the loss of value doesn't show up on any monthly receipt, which makes it easy to ignore.

Let's calculate this concretely. Suppose you buy a new €30,000 car and drive it for five years:

• Fuel: ~€1,500/year → about €7,500
• Insurance: ~€600/year → about €3,000
• Servicing and tires: ~€500/year → about €2,500
• Total running costs over 5 years: ~€13,000

Now for depreciation: that same car will be worth about €15,000 after five years. This means depreciation alone cost about €15,000 — more than all the fuel, insurance, and servicing receipts combined. This is why it's the most expensive yet least noticed mistake: you pay for value you'll never get back.

There is a way to stop paying for depreciation altogether. With a MyBee subscription, you pay only for using the car, not for an asset that's losing value. Find out how the subscription works →

Which cars hold their value best in Lithuania?

In Lithuania, value is best retained by in-demand, economical, and reliable models that are constantly sought after on the secondary market. A practical family crossover or a popular estate (wagon) with real resale demand will remain more valuable after a few years than a rare or luxury model.
A few local-market nuances worth knowing before buying:

• Fuel type matters. Diesels held their value in Lithuania for a long time, but tightening urban emission zones and shifting demand are gradually changing this rule.
• Electric cars depreciate faster. Rapidly advancing battery technology and frequent model changes mean an older-generation electric car loses value faster than a comparable internal-combustion car.
• The premium class falls the most. Even if the percentage is similar, the amount lost on an expensive branded car is far larger in absolute terms.

What factors determine a car's depreciation?

The rate of depreciation is determined by more than just age. Two cars made on the same day can cost completely differently after three years, depending on several key factors:

• Mileage — the more it has driven, the lower the value.
• Make and model demand — popular models drop more slowly.
• Condition and history — accidents, service history, body condition.
• Trim and color — neutral colors and in-demand equipment help retain value.
• Arrival of a new generation — when an updated model is released, the older one immediately drops in value.
• Market trends — fuel prices, taxes, technology changes.

How to avoid or reduce car depreciation?

It's impossible to completely avoid depreciation if you own the car, but the loss can be greatly reduced or the risk transferred to someone else. Here are the main ways:

• Buy a 2–3-year-old used car, not a new one. The first owner has already taken on the heaviest part of the depreciation.
• Choose value-retaining models. An in-demand, reliable car loses value more slowly.
• Don't over-buy. Don't pay for a class, engine, or equipment you don't really need.
• Don't finance a depreciating asset. Expensive leasing or a loan only adds interest on top of an already-depreciating car.
• Consider alternatives to buying — long-term rental or a subscription, where the depreciation risk is no longer yours at all.

If you still want a new car

Then at least choose a value-retaining model, a neutral color, and don't tack on extra equipment that no one on the secondary market values. Be prepared to take on the biggest value drop in the first year.

If you're considering leasing

Leasing doesn't eliminate depreciation — you're still the owner, so all the risk of value loss remains yours. When the contract ends, you often still have to figure out what to do with the depreciating car.

If you need a car temporarily

When you need a car for a specific period or for changing needs, a subscription lets you use a car without any depreciation risk and return it at any time.

Buying, leasing, or subscription — where does the depreciation risk lie?

The key difference between the options is who takes on the depreciation. When buying or leasing, the risk stays with you; with a subscription, the service provider takes it on.

With a subscription, the depreciation risk simply no longer exists. You choose a model, you drive, and MyBee — not you — takes care of the value loss. Browse the most popular models →

How does a subscription eliminate the depreciation risk?

A subscription eliminates the depreciation risk because you never become the owner of the car — you pay only for usage, while the depreciating asset itself stays with MyBee. When you no longer need it, you simply return the car, and there's no need to think about how much and to whom you'll sell it.

The MyBee subscription works on an "all-inclusive" principle: a single fixed monthly payment includes insurance, servicing, tire replacement, and 24/7 roadside assistance. With no down payment and more flexible than leasing — without the long-term commitment that turns a car into a burden. Instead of thousands of euros quietly melting away into the car's value, you pay a predictable amount for actual usage.

Stop paying for car depreciation. Choose a subscription where this risk is no longer yours — with no down payment and everything included. Browse MyBee cars →

Frequently Asked Questions

How much does a new car depreciate in the first year?

A new car loses about 20–30% of its value in the first year. The biggest drop happens the moment it's registered, when the car becomes "used."

Which car depreciates the least?

The slowest to lose value are in-demand, reliable, and economical models that are constantly sought after on the secondary market. Rare, luxury, or rapidly aging-technology cars lose value faster.

Is it worth buying a new car?

If minimizing losses is the priority, a new car is often not the optimal choice, because it takes on the largest part of the depreciation. A used 2–3-year-old car or a subscription lets you avoid this mistake.

Does leasing protect against depreciation?

No. When leasing, you remain the owner of the car, so all the depreciation risk falls on you, and when the contract ends you still have to figure out what to do with the depreciating car.

Is a subscription cheaper than buying?

A monthly subscription payment may be similar to a loan or leasing payment, but it includes insurance, servicing, tires, and 24/7 assistance — and most importantly, it eliminates the depreciation risk and unexpected repair costs. When you account for all ownership costs, it pays off for many people.

How do I find out how much my car has already depreciated?

Compare the price you paid with the current market prices of similar cars of the same model, year, and mileage. The difference is your depreciation.

The bottom line

Depreciation is the quiet but most expensive part of car ownership — and the only one that can be almost entirely eliminated through choice. If you want to drive a new car without losing thousands of euros in value, a subscription lets you pay only for what you actually use.