Depreciation is the running cost that too many people forget. It hits newest cars hardest. A new £15,000 Vectra will have a residual value (i.e. trade value) of under £9,000 after a year - over 40% of the new price wiped out in 12 months and 10,000 miles. Even supercars aren't immune: a Porsche 911 sheds 10% of its original value in its first year.
DIMINISHED BY DEPRECIATION
Rounded figures for illustration only. Petrol models at 10,000 miles p.a.
£ = projected residual (trade) value; % = residual value as percentage of new price
| Type of car |
New |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
| Supermini (Peugeot 206 1.1) |
£8500
100% |
£5500
65% |
£4600
54% |
£3750
44% |
£3150
37% |
| Small Family (Ford Focus 1.6) |
£12500
100% |
£7500
60% |
£6400
51% |
£5250
42% |
£4150
33% |
| Medium Family (Peugeot 406 1.8) |
£14000
100% |
£6850
49% |
£5740
41% |
£4750
34% |
£3800
27% |
| Executive (Vauxhall Omega 2.2) |
£20000
100% |
£9200
46% |
£7600
38% |
£6200
31% |
£5200
26% |
|
Three factors drive depreciation: age, mileage and condition.
Age is the principal factor: car designs have a limited life (just three years for some Japanese ranges!), and prices take a lurch downwards when a replacement model is announced. High mileage makes values drop faster, so well-used ex-fleet cars are cheap. And poor condition hammers values: patchy servicing can shorten a car's life, while tatty cars cost a lot to refurbish.
Residual values for all new cars are listed in our new car specifications section. Use them to identify cars that depreciate slowly, compare depreciation rates, and save yourself £££s of running costs.
