Depreciation is often the hidden factor that many car buyers don't consider when purchasing a new vehicle, but it's an ugly reality that could end up costing you a lot of money in the long run, according to Consumer Reports.

For example, many are tempted right now to trade in their old gas guzzler for one of the new models that get great fuel economy. It seems like a no-brainer, right? However, when you factor in the cost of depreciation, you're likely not saving yourself too much money. Older cars depreciate much slower – a car doesn't lose much value between year five and year six, but loses a ton between years one and two.

In the end, that money that you lose to depreciation might actually outweigh how much you save at the pump. Even if you go from an SUV to a hatchback, you'll likely only save $20 – $30 every time you fill up. Assuming you go to the pump 1-2 times per month, that's really only a few extra hundred bucks in your pocket every year. Useful to be sure, but small compared to the costs of getting a new vehicle. Plus you're normally giving up size, utility and performance to do so.

Instead, consider car loan refinancing. This easy process can help you lower your monthly payments without forcing you to change your vehicle. You might end up saving just as much as if you swapped to a more fuel efficient model – but you won't have to worry about depreciation.