How Color Can Affect Your Vehicle’s Resale Value (and Why Yellow Is Better Resold Than Black)
Recent research shows that color can be an important factor in a car’s resale value – with three-year depreciation that can vary up to 25% depending on the color. What’s most surprising is that unusual colors like yellow or orange are actually better overall than traditionally “safe” colors like black or gray. But should the resale value of a color be an important factor in a buying decision? Well, it’s not that simple – the cushioning range is skewed by scarcity, model type, and changing consumer tastes.
Safe, boring colors won’t hurt or help
According to research by iseecars.com , the total vehicle wear range over three years, based on color alone, is between 20.4% and 45.6%.
Surprisingly, popular colors like white, black, and silver are right in the middle of this range, while yellow, beige (yes, beige ), and orange offer the most value. Why could this be so? As iSeeCars Executive Analyst Karl Brower said:
A kind of self-fulfilling prophecy happens here, with many consumers choosing these primary colors not because they like them, but because they assume everyone else is doing it. This makes white, black, and silver appear to be highly sought after, but our analysis confirms that more obscure colors tend to retain their value better than common and popular colors.
The idea is that people are more likely to play it safe with boring colors when the car is new, especially if they plan to sell it later. On the other hand, used cars are much cheaper, so it makes sense that people can choose what they really like in this buying scenario, especially if they don’t plan on selling it.
But the lack of supplies of rarer colors also does not fully explain the discrepancy, as the results vary quite a lot between the car brands and even between the models. For example, orange is not common, but is popular with sportier SUVs or flamboyant coupes, but it depreciates another 10% if the car is a sedan. (And just because color rarely means it guarantees great value, as brown and gold are rare and in low demand countries).
In addition, some colors are in high demand in categories of car types that traditionally have low damping (e.g. coupes), and this can skew the overall results and give the impression that the color is, on average, more popular than it actually is. As Tyson Jominy, VP of Data and Analytics at JD Power explains to Autoweek :
The danger is relying on averages for an attribute such as color, which is not usually distributed across vehicles and segments. We have to isolate a particular vehicle to determine what effect color has on obsolescence. How is the yellow F-150 versus the black F-150 or the silver 911 versus the blue 911? Here we find that color can add or subtract the nominal amount available, perhaps up to a couple hundred dollars.
How important is color to consider when buying a car?
When you resell a car, you can earn a few extra dollars by strategically choosing a color that is popular for that model. For example, you might buy a beige truck, assuming it will remain the most popular truck color because, as the New York Times notes , many truck owners are small business owners looking for a neutral color for their work truck signage. On the other hand, you are unlikely to have any luck chasing a currently popular color such as yellow, as tastes can easily change by the time you’re ready to sell it. (Remember how big turquoise was in the 1990s?)
“Really, buy whatever color you want without worry,” says Jominy. “Color has to be judged against other factors of ownership, such as geographic location, vehicle maintenance, smoking, pets, small children, or long commutes. The differences are so small during the exchange, and if the dealer is not offering enough on your trade due to the bright color, list your car on any national used car sales channel to privately sell it to another consumer who will do so. “