Picking the right color has always been a big, emotional part of buying a new car. But color can also affect how much a vehicle is worth at trade-in time and the price it will fetch on the used-car market. And sometimes, hues that are less popular among new-car buyers can boost a car’s resale value.
According to a recent study by research and data company iSeeCars, the average car depreciated by about 30 percent during the first three years of ownership. In the same period, orange and yellow cars lost only about 22 percent of their value. Indeed, in an analysis of 1.6 million vehicles, orange and yellow cars depreciated less than those painted any other color. Green was the next best at about 25 percent depreciation.
Phong Ly, CEO of iSeeCars, attributed the market performance of orange and yellow vehicles to “supply and demand.” Because cars in orange, yellow and green make up just 1.5 percent of all vehicles, they can be hard to find. But they are popular enough among used-car shoppers to command higher prices. Another possible factor? Sports cars and luxury models often come in bright colors, whereas more conservative vehicles tend to stick to a more neutral palette.
More Money videos
Tax season, new styles, home decorations: How to prepare for spring
From ‘Jetsons’ to reality: This flying car prototype doubles as a sports car
How to handle the cost of aging parents: Is a reverse mortgage for you?
Want to be a millionaire? Start by making your bed!
This might be a surprise for many drivers because of the long-accepted rule that odd colors hurt resale value. One of the reasons that bland colors like white and silver have dominated the auto industry for decades is because buyers feel they will be worth more when it is time to sell or trade them in for a newer model.
Jane Harrington, manager of color and styling, automotive OEM coatings for PPG, told TODAY that people are often attracted by bright, exciting colors but wind up picking milder shades.
“A car is such a major expenditure for most people that they are not willing to take chances with a color that might hurt resale value.”
Still, she says, drivers tend to associate bright colors like orange with “high energy and high performance,” and that can be enough to boost demand for certain models.
The chart below shows the average depreciation of vehicles by color:
Ly of iSeeCars said more popular new-car colors like black, white and gray showed depreciation that was closer to that of average cars “because buyers shopping for such colors have a lot more choices, sellers may not have as much pricing power.”
Meanwhile, owners of orange and yellow cars might be able to negotiate higher trade-in values at the dealership.
Of all the colors in the study, gold fared worst. Gold vehicles depreciated by about 34 percent. Ly attributed this in part to the fact that most gold cars are sedans, for which demand has been relatively low in recent years. "We suspect that the lower popularity of sedans may be what's driving the depreciation of gold vehicles overall," Ly said.