It’s easy to overlook depreciation when considering a car purchasers buying process. Running costs like fuel consumption, servicing and road tax are important factors to consider. However, they rarely add up to as much as the amount a new car loses in value over the first couple of years of ownership.
For used car dealers depreciation isn’t always a bad thing. It can prove useful to canny traders who can offer customers a great value deal on a nearly new used car. Punters can end up with a lot of car for their money.
But traders always need to be mindful of the fact that certain vehicles are likely to continue depreciating faster than others. If you buy at the wrong time and this stock hangs around longer than intended, that “bargain” you’re hoping to promote and make a quick profit on, could end up proving an expensive mistake!
What Car? Magazine in collaboration with valuation firm Cap HPI have researched the 10 fastest depreciating new cars on sale. This is based on a projected trade-in valuation with 36,000 miles on the clock. Some of the cars that depreciate worst hold less than a third of their value.
As we’ve been mentioning on The Plan Blog for a while, used cars are more in demand than ever before. As a result of people wanting to avoid public transport, alongside problems in the supply chain for new vehicles, used car prices are experiencing higher growth than ever before. With used car prices booming, and all that opportunity out there for traders it would be even more galling if you end up getting caught out by depreciation.
Top of the list, or bottom depending on how you want to look at it, is the Audi A8 55 TFSI quattro Vorsprung. It retains only 27.3% of its purchase price and accumulates £77,000 in lost value. The phrase drops like a stone springs to mind.
Editor of What Car?, Steve Huntingford, points out that, ”Badge appeal and a high list price are no guarantee of a slow depreciating car. Factors such as what segment it falls into, how well it has sold, the trim and option levels available, and fuel types all influence how well a car holds its value over the years.”
There are clearly going to be several factors that influence the rate and extent to which a vehicle depreciates. As ever, it’s important that traders do their research carefully. Below is the list of the top 10 fastest depreciating cars to help provide a quick steer.
Top 10 fastest depreciating new cars:
- Audi A8 55 TFSI quattro Vorsprung
List price: £106,305
Resale price: £28,975
Retained value: 27.3%
- Vauxhall Combo Life 1.2 Turbo 130 Elite
List price: £28,260
Resale price: £8,150
Retained value: 28.8%
- Fiat 500 Convertible 1.0 Pop
List price: £15,910
Resale price: £4,650
Retained value: 29.2%
- Mercedes-Benz S-Class Coupe S560 Grand Edition
List price: £125,010
Resale price: £36,800
Retained value: 29.4%
- Peugeot 108 1.0 72 Active
List price: £12,785
Resale price: £4,000
Retained value: 31.3%
- (Tied) Mercedes-Benz SL 500 Grand Edition
List price: £89,235
Resale price: £29,325
Retained value: 32.9%
- (Tied) BMW 2 Series Active Tourer 216d SE
List price: £27,975
Resale price: £9,200
Retained value: 32.9%
- BMW 2 Series Convertible M240i Nav auto
List price: £45,385
Resale price: £15,075
Retained value: 33.2%
- Vauxhall Astra 1.5 Turbo D SRi Nav
List price: £23,675
Resale price: £7,900
Retained value: 33.4%
- Citroen Spacetourer 1.5 BlueHDi 120 Business M
List price: £37,005
Resale price: £12,500
Retained value: 33.8%