RE: New Cars Lose £17 A DAY!
Wednesday 5th March 2008
An expensive car, yesterdayA new study has calculated the cost of depreciation for owners of new cars at a staggering £510 a month.
That's an unbelievable £17 a day and comes before factoring in the costs of fuel and insurance.
Latest research shows that the top ten selling cars in 2007 depreciated by an average of 43 per cent or £6,124 in the first year alone leaving consumers an incredible £5billion out of pocket.
Obviously, the level of depreciation varies from one car to the next according to factors like the car's popularity, the number of vehicles manufactured and the perceived value or quality of the brand among consumers.
But depreciation accelerates after a car's first birthday hitting 54 per cent by the second year of purchase, 61 per cent by year three and 68 per cent by the fourth year.
In fact, uSwitch.com - who undertook the study - estimates that an average of £9,800 is wiped off the value of a new car in just four years.
The worst performer is the UK's 10th best-selling car - the Vauxhall Vectra 1.9 CDTI - which loses 58 per cent of its value after the first year alone, and 75 per cent after four years - which equates to a £550million loss for owners.
New Cars Lose £17 A DAY!
It's enough to take the shine off any new car
An expensive car, yesterday
That's an unbelievable £17 a day and comes before factoring in the costs of fuel and insurance.
Latest research shows that the top ten selling cars in 2007 depreciated by an average of 43 per cent or £6,124 in the first year alone leaving consumers an incredible £5billion out of pocket.
Obviously, the level of depreciation varies from one car to the next according to factors like the car's popularity, the number of vehicles manufactured and the perceived value or quality of the brand among consumers.
But depreciation accelerates after a car's first birthday hitting 54 per cent by the second year of purchase, 61 per cent by year three and 68 per cent by the fourth year.
In fact, uSwitch.com - who undertook the study - estimates that an average of £9,800 is wiped off the value of a new car in just four years.
The worst performer is the UK's 10th best-selling car - the Vauxhall Vectra 1.9 CDTI - which loses 58 per cent of its value after the first year alone, and 75 per cent after four years - which equates to a £550million loss for owners.
Discussion
Do people actualy still buy new cars?
Did a quick poll in the office here, No new cars owned by any of the 45 people, 2 have compnay cars which where new....
My 14year old Carlton was £21,000 less than new price when I bought it! And I still get heated leather seats, air-con, 8 Speaker Bose stereo system and I'm saving the planet by not scrapping it because its full of poisoness non-recyclable parts! ;-)
Did a quick poll in the office here, No new cars owned by any of the 45 people, 2 have compnay cars which where new....
My 14year old Carlton was £21,000 less than new price when I bought it! And I still get heated leather seats, air-con, 8 Speaker Bose stereo system and I'm saving the planet by not scrapping it because its full of poisoness non-recyclable parts! ;-)
Ry_B said:
Hence why it's all about the 3 year old cars (if you want something fairly new)
Correct. I see no point at all in buying a brand spanking new car unless you just want the smug satisfaction of seeing it with less than 3 figures on the clock.Let someone else take the hit of the depreciation, then pick up the exact same car for half as much when it's 3 years old. Let's face it, in that time it's not exactly going to become an unreliable rustbucket.
How can the depreciation accelerate in the second year? Surely the second/third/fourth year depreciation figures are a percentage of the original purchase price and therefore reflect a lower rate of depreciation than in the first year? Otherwise a £14k car would be worth only £3700 at the end of year two and £1450 at the end of year three. I know second hand cars are cheap but not this cheap surely?
article said:
But depreciation accelerates after a car's first birthday hitting 54 per cent by the second year of purchase, 61 per cent by year three and 68 per cent by the fourth year.
This is misleading. The depreciation does not accelerate, it decelerates. The overall depreciation after 2 years is 54 per cent, then 61 per cent after 3 years. If depreciation year on year increased to the levels suggested in the article a £14,000 car would be worth £500 after 4 years... Do you really think the overall value of the carwould go up after the first year (i.e. after 2 years the depreciation is 30 per cent)???In fact it will be worth (on average) £14,000 x 32 per cent = £4,500
Jack_and_MLE said:
Car get used, and gets older therefore it looses value, quite logical, and don't understand what is the problem with that.
Where is the problem?
The problem in some people's eyes is that they have just paid for example say £20,000 for a new car and that after 1 year its only worth £12,000-14,000 (yes I know, my numbers may not be correct, but its an example.)Where is the problem?
)...sniff petrol said:
They always base these depreciation figures on buyers paying full list price, which is extremely rare in the case of these types of cars.
It's all a load of headline grabbing non-news.
Take the Vectra 1.9 CDTi Design 120 Hatchback as an example (as they label it the worse car for depreciation)
List Price = £19,625.00
You should be able to get 24% off list realistically = £14,915.00
A private sale on an early 07 at say £9700.00 in excellent condition and 10k (not got Glass' to hand but sounds about the money) would equal £14.29 per day over the first year and that's for the WORST performing car.
And for that you get the peace of mind of a warranty etc..
Not saying I would purchase brand new myself or particularly choose a Vectra, but the figures are very misleading indeed.
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