How to avoid car-value depreciation

Motorists may view fuel, car insurance and servicing to be the largest drains on their pockets - but, in fact, often the biggest cost of ownership is depreciation. A fall in the value of your car is inevitable, and while losses can vary considerably from model to model, the average motor will have lost around 60 per cent of its value by the end of its third year, according to the AA.

Levels of vehicle depreciation are based on various factors, such as the popularity of the car, the number of vehicles manufactured, and the perceived value or quality of the brand. Here's our guide to some of the models that depreciate the least.

Audi 2
Cars that always hold value better are small cars such as the Audi 2, as they benefit from the "small car premium", according to Matt Tumbridge from Used Car Expert Magazine. This means such vehicles tend to be in greater demand on the used-car market.

Honda Jazz
As with the Audi 2, the Honda Jazz is a small car. It is also inexpensive to buy and in high demand on the used car market.

BMW Mini
The trendy Mini Cooper is a very popular model with something of a cult following, and loses as little as 10 per cent of its value in the first year.

BMW 3-Series
The BMW 3-Series, a compact executive car, is a brand that people are prepared to pay money for. "If you buy a one-year old BMW 3-Series 2.0 for £18,000, a year later it will only have lost between 6 and 10 per cent of its value," says Tumbridge.

VW Golf
The VW Golf is also a popular make and model that motorists will pay for: those who buy a one-year old VW Golf 1.6 can sell it on after two years having lost just £1,500, according to Tumbridge.

Alfa Romeo
A brand new Alfa Romeo GT 1.9 JTD will cost around £25,000, and may lose a lot of value early on, but this car then goes on to become an attractive buy. Once these cars have been traded in by the company-car driver they tend to go through auctions to main dealers who sell them on at competitive prices with a relatively low mileage.

Peugeots and Renaults
A similar rule applies to almost all Peugeots and Renaults which also lose a lot of value in the first two or three years, before becoming a more attractive purchase.

Saab 9-3
The Saab 9-3, a compact executive car which is rather like a BMW in its qualities, is appealing because it comes at a lower price: a three-year old 2.0 series will cost £3,000 less.

Rovers
A Rover benefits from the fact people don't know the relative value, so will therefore pay more.
The Rover 75, for example, is kitted out well and seems like a luxurious car, and buyers will pay £4,000 for a 2004 model - even though you could buy a better car for the same money, according to Tumbridge.

Daewoo Kalos
The Daewoo Kalos, a decent-looking super-mini with a high spec, also benefits from the fact people think they are getting a good deal because it sounds cheap, at just £3,000 for a 2004 model.

Selling your car
Tumbridge points out that a vehicle which holds its residual value well is not always the easiest to sell on, while cars that hold their value less well become cheap more quickly, and are therefore easier find purchasers for.

"As a buyer, the key is to find the spot between the point where the vehicle has lost the worst bit of depreciation, and yet is still in good condition and will still be reliable," he says.

About the Author

For more really handy pointers, read the Confused.com guide to buying a car. They also offer car depreciation insurance. And don't forget to compare car insurance with them too to find a policy to suit your needs.

Author (bythesea). Submitted on Mon, 30 Aug 2010 Time: 4:35 AM

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