Retail Shock: The Top Consumer Products That Lose Value Rapidly

Some of your favorite consumer products depreciate quickly, leaving you with a product worth much less than you paid. From electronics to fashion to cars and even vacation timeshares, these items all have one thing in common: They all plummet in value in the first year of ownership.

Here are four categories of consumer products that depreciate rapidly. If you buy these products, they will lose a great deal of their value within a year.

Key Takeaways

• Electronics, fashion, cars, and vacation timeshares can all lose their value rapidly in the first year that you own them.
• Because you won’t make much money selling them, it is smart to hang on to these items for as long as they work and you wish to use them.
• But if you would like to sell an item—say, clothes at a used clothing shop—you may get a small sum. Bigger products, such as used cars, can also be sold for a depreciated price.
• Buyers who like secondhand items can find and buy used products at much lower prices.

Electronics

Smartphones lose their value rapidly within the first year of ownership.

“(Smartphones) depreciate by 50% of their value within a year, with new versions featuring better capabilities being released,” says Michael Khoury, chief executive officer at Go Vertical.

Laptops and tablets also quickly decline in value. “Laptops and tablets depreciate by 30 to 60% within the first year due to hardware upgrades and software obsolescence,” Khoury says.

Other popular electronics such as televisions and home entertainment systems are also quick to depreciate due to continual advances in screen technology, Khoury says.

Fashion

Even fashion gets hit with a big drop in value. Fashion items drop 50% to 70% in value almost as soon as you wear them, according to Jeanel Alvarado, retail strategist and founder of Retailboss.

“Used clothing in designer wear doesn’t hold its value unless it’s maybe a rare piece off the runway,” Alvarado says. “But for most customers who buy ready-to-wear in store, the price decreases by 50% after it’s worn once. Even runway pieces, which may retail for $5,000, (find) it hard to command anywhere close to that in the secondhand market.”

The exception is designer handbags. These items from designers such as Louis Vuitton hold their value.

“A Gucci $3,000 jacket (could) resell for $900, but Louis Vuitton’s Neverfull bag? It gained 167% since 2010—proof that designer bags beat collection hype,” Alvarado says. “While mass-produced ‘luxury clothing’ drops 70%, luxury handbags retain 80% value through relentless scarcity tactics. The Hermès Birkin bag doubled in value after five years. It ranks as #1 in luxury bags for highest resale value with a 250% retention rate.”

Cars

A new car depreciates 20% to 30% in its first year. When you reach the fifth year of ownership, a car has kept only 40% of its value. Luxury models have even steeper depreciations.

“A 2025 BMW 5-Series Hybrid will lose 20 to 30% of its value before your first oil change. Even luxury SUVs like the Lincoln Navigator lost 47% resale value in three years—a[n] $83K ride becomes $44K,” Alvarado says.

Fortunately for car shoppers, some brands of cars hold their value better than others. If you are looking for a car with a lower depreciation hit after five years of ownership, shop Toyota, Mazda, Honda, Subaru, and Jeep.

Timeshares

That vacation timeshare that you were so excited about loses its value quickly.

“Timeshares almost universally lose 90% to 100% of their retail purchase value the instant they are bought,” says Brian Rogers of the Timeshare Users Group. “Timeshares today sell for an average of $24,000 when bought during sales presentation, and for the most part, that same ownership or points package is offered for free on the resale market by owners who just want out and to stop paying their annual maintenance fees.”

The 100% depreciation seems extraordinary.

“It’s not even a mild exaggeration to make the 100% depreciation claim. Heck, sometimes it can be even more than 100% depreciation because many timeshares will charge owners hefty sums of money to take them back,” Rogers says.

The Bottom Line

If you bought an item with a big depreciation hit in its first year and onward, consider hanging on to the product for as long as you can. You won’t get much if you try to resell it, and if it still works and you are satisfied with the product, it is wise to keep it.

Be aware if you buy a similar, new product again that you’ll be facing a big loss in value in the first year and beyond. If you are comfortable buying used products, you’ll pay much less. Shop used for clothing, electronics, and cars and save.