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What is meant by the depreciation of a car?

Depreciation is the difference between the value of a car when you buy it and what it's worth when you come to sell it. Different cars models lose their value at different rates, but a sad fact of life is you can expect something in the region of 15-35% being lost in the first year, with around 60% or more lost over three years. What a car is worth after depreciation is known as its residual or resale value.