Desirability index pins depreciation

How much will it sell for? Look here

By PH Staff / Thursday, 23 June 2005 / Loading comments

Desirable

Auto Trader and Spyder Automotive have come up with what they describe as a desirability index, which might prove a good guide to the depreciation of a new or nearly-new car. to come up with the definitive answer.

The index looks at all models in the last three years (this time frame is used as it is the average time that new car owners sell their cars) and correlates new car sales against searches for the same models on Auto Trader’s Web site. To be included, models had to be on sale at least from the end of 2000 through to 2004 and had to sell at least 5,000 units in that period, leaving a total of 120 model ranges.

For every Toyota MR2 sold in Britain, there were 310 searches on the Auto Trader Web site during 2004. At the other end of the scale, there were only three searches for every Vauxhall Agila.

Within the top 10, Audi and BMW gain two entries each - both are clearly prestige marques whose success in the new car market appears to be driving desirability in the used market. Perhaps surprisingly Mercedes, arguably less successful in new car sales, does not appear in the top 10, despite its prestigious brand heritage and the associated potential for used car buyers to find a quality used car bargain.

Desirability Index Top 10: vehicles showing the highest ratio of searches on autotrader.co.uk relative to new vehicle sales during the preceding three years.

Desirability ranking	Model	Searches per car

1	Toyota MR2	310.84
2	Porsche 911	302.49
3	Subaru Impreza	211.77
4	BMW 7 Series	197.72
5	Porsche Boxster	122.55
6	Land Rover Range Rover	119.76
7	Toyota Celica	118.73
8	BMW 5 Series	103.37
9	Audi A3	94.13
10	Audi A6	80.19

In the bottom ten, MG Rover has two entries, perhaps unsurprising given recent events. However, if you look across the individual model-range, the story is far from consistent with the MG TF showing a ratio of searches to vehicles sold exceeding prestige brands such as the Mercedes ML and Jaguar S-type, as well as more mainstream models such as the Honda Civic, VW Beetle and Seat Leon.

The remainder of the bottom 10 showed a predominance of MPVs and Mini MPVs suggesting the market, heavily driven by cost-cutting and new car offers, is now flooded with choice. With larger MPVs like the Sedona available for a similar price to smaller alternatives, consumers appear to be spreading thin across a range of new and used options.

Bottom 10: vehicles showing the lowest ratio of searches on autotrader.co.uk relative to new vehicle sales during the preceding three years.

Desirability ranking	Model	Searches per car
116	Renault Scenic	5.85
117	Mitsubishi Space Star	5.15
118	Nissan Almera Tino	4.84
119	Hyundai Matrix	4.80
120	Rover 25	4.48
121	Suzuki Wagon R+	4.30
122	Rover 45	4.11
123	Citroen Picasso	3.84
124	Kia Rio	3.63
125	Vauxhall Agila	3.01

The above suggests that while manufacturers can encourage new car registrations by giving big discounts, short term rewards may come at the expense of decreased buyer loyalty in the used market. Furthermore, the index not only shows how much interest there will be in a car, it also indicates which cars are likely to be most valuable after three years.

With vehicles in the top of the index worth an average of 46 per cent of their original value after three years, and those in the bottom worth only 34 per cent, it provides an interesting guide on which vehicles drive the best long term value for retailers.

Jim Murray Jones from Auto Trader said, "By tracking Auto Trader’s customers, comprising over 5.8 million car buyers and sellers, we can identify purchasing trends. Our new Desirability Index is the first of its kind, giving dealers a powerful insight into the potential desirability and value of more than 100 car models."

Spyder Automotive boss Jay Nagley said, "This unique study not only shows which cars do well in absolute terms, but how similar cars fare against each other. For example, each VW Golf had 13 times as many searches as each Rover 45 – a perfect reflection of their relative desirability. Equally, the fact that a small MPV may not score very well is less important than whether it does better or worse than other small MPVs."