A recent study shows that color can be a big factor in a car’s resale value – with a three year depreciation rate that can vary by 25% between colors. Most surprisingly, weird colors like yellow or orange fare better overall compared to traditionally “safe” colors like black or gray. But should the resale value of a paint be an important factor in your purchase decision? Well, it’s not that simple – the depreciation margin is skewed by scarcity, model type, and changing consumer tastes.
Safe, boring colors won’t hurt or help you
After a iseecars.com study, the total range for the depreciation of cars within three years, based on the color alone, ranges from 20.4% to 45.6%.
Surprisingly, popular colors like white, black, and silver are right in the middle, while yellow, beige (yes, beige), and orange offer the greatest value. Why should that be so? As iSeeCars Executive Analyst Karl Brauer puts it:
There’s a kind of self-fulfilling prophecy here where a lot of consumers choose these mainstream colors not because they like them but because they assume everyone else will. This makes white, black and silver look very popular. However, our analysis confirms that darker colors tend to hold up their value better than common and popular colors.
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The idea is that people are more likely to play it safe with dull colors when the car is new, especially if they plan on selling it later. Used cars, on the other hand, are much cheaper, so it makes sense for people in this buying scenario to choose what they really like, especially if they don’t plan on selling it.
But even the lack of rarer colors on offer does not fully explain the discrepancy, as the results are quite different depending on the car brand and even between models. Orange, for example, is not a common color, but is popular with sportier SUVs or flashy coupes – but it loses an additional 10% in value if the vehicle is a sedan. (And just because a color is rare doesn’t mean it guarantees more value, since brown and gold are both rare and in little demand).
In addition, some colors are in high demand in car type categories that are traditionally low in depreciation (like coupes) and can skew overall results and make it appear that a color is, on average, more popular than it really is. As Tyson Jominy, Vice President of Data and Analytics at JD Power, explains Autoweek:
The danger is to rely on averages for an attribute like color that is not normally distributed across vehicles and segments. We need to isolate a particular vehicle to determine the impact of color on depreciation. How does a yellow F-150 compare to a black F-150 or a silver 911 compared to a blue 911? Here we note that paint can add or subtract a nominal amount available, perhaps up to a few hundred dollars.
How much should you pay attention to color when buying a car?
It is possible to earn a few extra dollars reselling your vehicle by strategically choosing a color that is popular for that model. For example, you could buy a beige truck if you expect it to remain the most popular truck color there as the New York Times points out, many truck owners are small business owners who need a neutral color for their work truck signage. On the other hand, chasing a currently popular color like yellow, you will likely be less fortunate, as the taste can easily change when you are ready to sell it. (Do you remember how big teal was in the 1990s?)
“The reality is, you can buy any color you want without worry,” says Jominy. “Color should rank with other property factors like geography, vehicle maintenance, smoking, pets, young children, or long commutes. The differences are so small at the point of trade-in, and if a dealer isn’t bidding enough because you have a flashy color, list your car on a national used car sales channel to privately sell to another consumer who will . ”
