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How to beat car depreciation

Buying a brand new 16-plate car? Steer clear of cars that lose their value quickly…

Car buyers are being advised to think twice about splashing out and buying brand new this spring.

Selling points such as great fuel economy may lead people to think they are getting a great deal on their factory fresh car, but one thing that many fail to take into consideration is depreciation.

Vehicle depreciation is the difference between a car’s value at the time of purchase and how much it’s worth when it comes to selling it.

While we’re all well-aware that a brand new car loses value as soon as it’s driven off the forecourt, by the end of the first year alone, some models can lose as much as 50% of their value.

“With fuel economy the hot topic on every motorist’s mind, it seems car depreciation costs might well be getting forgotten,” says Matt Kay of Bury-based car dealership cartime.

“As fuel is generally considered to be the biggest everyday motoring expense, many of those considering buying brand new might be doing so to get the best possible savings from fuel economy.

“Car depreciation can actually cost the typical motorist up to three times as much as they would normally spend at the pumps – so it really is depreciation that’s the true cash-burner.”

To gain the best possible savings over time, Matt warns that buyers must opt for a model that will hold its value well, rather than focusing purely on fuel economy or a flashy new number-plate.

“Depreciation will slow considerably as a vehicle’s age increases, so buyers might find that a nearly new car (one to two years old) is much better value than a brand new one.

“When the new 16-plate comes onto the market, many will race to buy a new car, justifying the inflated price with the fantastic fuel economy that these cars often promise,” explains Matt.

“However, these savings are massively outweighed by the costs of vehicle depreciation. Although many drivers are aware of depreciation in general, the true statistics often come as a shock.”

Research from CAP Automotive shows that a typical medium-sized family car in the first three years of ownership is expected to lose around £12,559 in value.

Basing fuel costs on an average mileage of 12,000 miles per year, fuel costs would add up to around £4,000 for those three years – meaning that car depreciation could actually cost the buyer up to three times more.

“Generally, it’s 4x4s and SUVs that hold their value better than other models,” says Matt.

“Electric vehicles are the worst by a long shot – and it’s typically these that people choose to buy to save money on fuel.”

Best models for money saving

Model Avg. Value Retained After 3 Years (%)
Porsche Macan 68
Range Rover 61
BMW X4 59
Audi A1 52
Peugeot 108 49

Models that fare worst

Model Avg. Value Retained After JUST ONE year (%)
Renault Fluence E Z.E 27
Vauxhall Meriva 29
Chevrolet Cruz 31
Citroen C-Zero E 32
Nissan Leaf E 33


About Gareth Herincx

Gareth is a versatile journalist, copywriter and digital editor who's worked across the media in newspapers, magazines, TV, teletext, radio and online. After long stints at the BBC, GMTV and ITV, he now specialises in motoring.

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