It has been a brutal two years for car buyers. Microchip shortages have made both new and slightly used cars scarce. That has driven prices higher. Dealers have started to charge above manufacturer’s suggested retail price (MSRP) for some vehicles.
The period has been a mixed one for car companies. They have been able to drop expensive, profit-robbing incentives. However, low inventory means low sales. Some assembly lines have been shuttered.
Semiconductor shortages are unlikely to end this year. These chips run the infotainment and navigation systems of most vehicles. Supply chains have been disrupted, primarily because of the COVID-19 pandemic.
One of the primary byproducts of the car shortage is that people own cars longer. The average age of a car on America’s roads is just over 12 years. Better-made cars are one reason.
As people look at the value of their used cars, they usually look at how many miles they have and whether they have been in accidents. It turns out there is another factor. The color of a car can affect its value.
When iSeeCars recently released its Car Color and Its Effect on Value: Which Colors Help and Hurt a Car’s Resale Value? report, iSeeCars Executive Analyst Karl Brauer commented, “With depreciation being the largest cost of vehicle ownership, consumers should carefully consider their color choice–especially if they plan on selling their vehicle.”
Interestingly, popular colors such as black, white and red have little effect on the value, when the yardstick is three-year depreciation. What is the best car color? Brauer says, “Because yellow vehicles are so novel in the secondhand marketplace, people are willing to pay a premium for them.” Three-year depreciation for yellow cars is 4.5%. That is a wide lead over second-place color orange with a three-year deprecation of 10.7%
The worst car color for holding value is brown, with depreciation of 17.8%
Here are the car colors with the most and least depreciation:
| Color | 3-Yr % Depreciation | Compared to Overall Avg |
|---|---|---|
| Yellow | 4.5% | 0.3× |
| Orange | 10.7% | 0.7× |
| Purple | 13.9% | 0.9× |
| Red | 14.0% | 0.9× |
| Green | 14.0% | 0.9× |
| Blue | 14.3% | 1.0× |
| Gray | 14.3% | 1.0× |
| Beige | 14.4% | 1.0× |
| Silver | 14.8% | 1.0× |
| White | 15.5% | 1.0× |
| Black | 16.1% | 1.1× |
| Gold | 16.7% | 1.1× |
| Brown | 17.8% | 1.2× |
Click here to see which is the most overpriced used car in America.
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