“This will hold its value.” It’s the line used to justify cars, houses, watches, sneakers, and handbags. Most people accept it as folk wisdom. The actual numbers, once you include fees, condition penalties, and the time spent selling, usually paint a different picture — and the difference between sticker resale and net resale is where the illusion lives.
Cars depreciate more than the brochures admit
Industry data from Edmunds and iSeeCars shows the average new car loses 20–30% of its value in the first year and roughly 50% by year five. Even brands marketed as resale champions — Toyota, Lexus, certain Porsches — still lose substantial money over typical ownership. Depreciation calculators rarely include the dealer auction discount you’d actually accept, which can run 10–15% under retail listing prices. Selling privately recovers more but takes weeks of effort, test drives with strangers, and paperwork. Lease residuals look generous on paper because the manufacturer is subsidizing them; that’s marketing math, not market reality.
Real estate appreciation is mostly inflation and leverage
People conflate house price growth with returns. From 1990 to 2020, U.S. home prices grew roughly in line with inflation in real terms, with regional bubbles averaging out. Leverage makes the personal return look bigger — a 5% down payment on a 10% gain looks like 200% — but you also pay property tax, insurance, maintenance (a rule of thumb is 1–2% of value annually), realtor commissions (5–6% on sale), and transfer fees. Net of those, the average homeowner’s annualized real return is closer to 1–2% on the equity invested, plus the imputed rent from living in it. That’s fine, but it’s not the slam-dunk investment story most owners tell themselves.
Collectibles markets are thinner than they look
Rolex, vintage cars, sneakers, trading cards, art — every collectible market has a top tier that holds value and a much larger middle that doesn’t. Auction houses charge buyers’ premiums of 20–25% on top of hammer prices and seller’s commissions of 10% or more. The spread between what you paid and what you’d net selling immediately is often 30–40%. Authentication, storage, insurance, and time to find a buyer eat further into the return. Headlines about a Daytona selling for $200,000 obscure the thousands of midrange watches that depreciate quietly.
Condition penalties are brutal
Resale guides quote prices for items in excellent condition, which most owned items aren’t. Cars with stains, dings, or service gaps; homes with deferred maintenance; watches with scratches or non-original parts; sneakers worn even briefly — all take steep discounts. Buyers price condition aggressively because they know they’ll spend money fixing it. Sellers anchor on the showroom number and feel insulted by realistic offers. The gap between perceived and actual condition is one of the biggest sources of disappointment in resale.
The takeaway
Resale value is a real factor but a smaller one than marketing implies. Buy what you’ll use and enjoy at a price that makes sense if you sold it for less than you hoped — because that’s the most likely outcome.
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