Depreciation is the difference between the price you pay for a new car and the amount you can recoup when selling it. Some cars hold their value well, while others experience rapid depreciation. We take a look at the the fastest depreciating cars this year.
People often joke about cars losing half their value the moment they’re driven off the forecourt, but that’s rarely the case. Even the worst performers will take a couple of years or more to lose half their value. However, there is still a vast range of depreciation performance across the new car spectrum.
Price depreciation is an inbuilt cost of having a car. Many believe it rivals fuel, tax or insurance. This second-hand price, also known as the car’s ‘residual value’, can be a real sting in the tail of any new or used car deal.
If your business buys, sells, repairs or modifies vehicles then Plan Insurance Brokers can source a tailored Motor Trade insurance policy for you. If you have any more questions or would like a quote call our expert team, request a call back or fill in a quote form.
The end of the golden age of used cars
Over the last few years, the depreciating car value has lessened. Over the last few years on the Plan Blog, we’ve covered how used car prices have been higher than ever before. This is a result of semiconductor shortages and problems with the supply chain. This had lessened the fear of rapid price depreciation, with used cars in good condition going for similar prices to brand-new cars.
Since the end of the pandemic, the supply of new cars is now returning to a level of normality. Many in the auto industry have said that production is still slow, just not as slow as it once was. Used car prices, however, still remain relatively high.
What makes a car depreciate fast?
The slowest depreciating cars are typically models in strong demand with desirable badges and good reputations for reliability, quality, and safety. These cars are discounted less than rivals when new and hold their value better over time.
On the other hand, the worst depreciators often have highly desirable badges too, but their new prices are just too high to maintain when it’s time to find a second owner. Our motor trade insurance clients will monitor depreciation carefully as it will significantly impact the value of the stock they hold.
‘Bread and butter’ models from mainstream brands whose badges offer little in the way of aspirational value can also suffer from rapid depreciation. Especially if their reputations for quality or performance are not on par with models from the ‘in demand’ brands.
Several factors contribute to this phenomenon. Age, mileage, and condition are the three most commonly-quoted factors used to appraise a car’s value. Additionally, external factors such as market conditions can have a strong effect on a car’s value. In 2021, as I mentioned above, shortages in new cars caused many used cars to temporarily increase in value.
Tracking the depreciation rate is imperative to stay on top of your car’s value and remain aware of how it changes over time.
Here are the 10 fastest depreciating petrol and diesel cars in the UK for 2023
The below list, with data provided by What Car?, covers cars that you can buy new today and looks at what they will be worth after three years and 36,000 miles of use.
These are the disastrous depreciators the experts say you shouldn’t touch if you want to hang on to your cash. However, if you’re a canny used buyer, these cars could be opportunities to pick up a three-year-old bargain.
- Mercedes-Maybach GLS
- Fiat Tipo
- Lexus LS
- DS 9
- Maserati Quattroporte
- Genesis G80
- Audi A8
- Peugeot 508
- Maserati Ghibli
- Suzuki S-Cross
Here are the 10 fastest depreciating electric cars in the UK for 2023
- Renault ZOE (38.58-43.95%)
- SsangYong Korando e-Motion (42-45.73%)
- Peugeot e-2008 (42.33-44.35%)
- Smart EQ Forfour (44.36-44.85%)
- Peugeot e-208 (44.64-47.49%)
- Smart EQ ForTwo (44.97-47.47%
- Fiat 500Ce (45.97-46.94%)
- BMW iX (47.22-59.15%)
- Genesis Electrified G80 (47.45-47.84%)
- Vauxhall Corsa Electric (46.98-49.21%)
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