New car depreciation rates revealed
While it is easy to bemoan rising fuel, VED and insurance prices, many owner-drivers do not realise how much money their new, or nearly new, car is shedding without them even realising.
Top Ten popular cars’ depreciation
Using data provided by Glass’s, insurethegap.com analysed the depreciation rates of the top ten best selling cars from last year and how they are predicted to hold their value over five years.
From a selection of petrol models, between 1400 and 1600cc, the MINI Cooper was quoted as depreciating the least, losing 49% of its value over five years; this still equated to £8,765, or an average yearly loss of £1,753.
While the Ford Fiesta (pictured) was the survey’s worst depreciator in percentage terms, ironically, it shed less money than the MINI: £8,395, or an annual average of £1,571.
The study, which included popular models in average condition from Mercedes-Benz, Volkswagen and Nissan, showed an average annual depreciation of £1,908, spread over a five years-long period.
Therefore, if you are looking to buy a new car, study the depreciation rates carefully and try to lessen the financial burden, by negotiating hard. Also, consider that, even if your virtually worthless old car is costing you £1,000 in repairs every year, you are still ‘quids in’.
Ownership in decline
An alternative to buying the car outright car is personal leasing, or Personal Contract Hire (PCH). This has become the second-most popular way of funding new cars, aside from Personal Contract Purchase (PCP), and can lessen the shock of depreciation.
Paul Harrison, Head of Strategic Partnerships at ContractHireAndLeasing.com, concluded that the market is changing and,
“…consumers are transitioning away from ownership towards usership – they want access to a new car rather than a commitment to buy it.”