Expected depreciation - opinions needed

[KhabibSmesh]

Hello all, new to forum but after some advice.

I'm after a hot hatch and want some thoughts on depreciation.

http://www.autotrader.co.uk/classified/advert/2018...

I'll be doing 11-13k miles a year. I've done some research and after 3 years I reckon it might still be worth anywhere between £15-£17k. Does that sound reasonable? Depreciation of ~£110 a month feels like a bargain for this car.

Alternatively, I am very much tempted by an ST3.

http://www.autotrader.co.uk/classified/advert/2017...

However I have no comparison for depreciation, feedback welcome!

Just to note I'm willing to listen to suggestions also but a 3ltr becomes very expensive for insurance, not a fan of 1 series looks or Megane RS.

Appreciate your thoughts! Thanks!

[DuraAce]

KhabibSmesh said:

I'll be doing 11-13k miles a year. I've done some research and after 3 years I reckon it might still be worth anywhere between £15-£17k.

3yrs/40k has to knock off more than 2k surely?
12 plate cars are in the 15s now (retail price)

I reckon you'll be at 13/14 for a private sale, maybe even lower for trade in.
Got to be lots more coming to market as the high number of PCP'd cars appear...

[KhabibSmesh]

I've messed up a bit and was looking at 12 plate autos! I think your estimate seems about right. Over 3 years that would be £150 a month loss, not bad.

Any idea on the ST3? Unknown territory for me!

Thanks for taking time to reply!

[Wooda80]

Whatever you are looking at, work on it dropping 25% per year on a reducing balance and you won't be far wrong. If it drops less then it's a bonus.

So the Golf in your link will fetch around £15k after a year, then around £11k after 2 yrs, £8500 after 3 and so on.

Expect that the Fiesta in your link will be around £8500 in 12 months time, £6k ish after 2 yrs, £4500 after 3 years etc.

Either might be worth a touch more as a private sale. Dependent on miles and condition of course. Any changes in the mean time in interest rates, insurance costs, road tax or economic sentiment in general will affect things either way.

Check out the thread about how long a piece of string is......

But yh, about 25% per year. Let's look back in a year and see!

[Dolf Stoppard]

Current gen Golf R worth £8.5k when it's five years old? Absolutely no chance given the way prices for previous models have held up.

[KhabibSmesh]

Completely agree, no way would it drop that low. Golf R's appear to hold their value quite well. Using 25% off each year is just incorrect.

[Toed64]

25% pa is about right for most diseasel cars at the mo - the Golf R is likely to depreciate less.

Edited by Toed64 on Sunday 28th January 08:52

[imdeman87]

I don't think he's that far off the mark with the Golf R and its depreciation. The mk7 R is nowhere near as limited in numbers compared to the other generations.

Right now you can get a 3 year old R with around 20k miles for around £18000 (according to autotrader). If you would have said that to me when the mk7 R was launched I wouldn't have believed you.

So for the OP to do another 40k miles over 3 years, I reckon a 6 year old Golf R with 60k miles will fetch around 9k trade or 10k private (if you're lucky).

The market's flooded with them.

If you're looking for a second-hand hot hatch with the least amount of depreciation, then the Golf R would be bottom of my list.

[Tucker1]

Prices on used MK7 R's are softening off now after holding very strong. They just refused to go sub £20k for a long time!

Having held above £20k for a long time they recently dived well below and now get much cheaper by the day. They have been around for 4 years now so are a few leasing cycles in. The M135 is a year or so older but is certainly well below with early cars at £15k which may be an indicator of where things could go for the Golf.The FK2 Type R is edging toward sub £20k too which I'm keeping a close eye on.

Lots of MK7 lease cars back and plenty around for sale used looking for buyers, there are continually more ex lease being trickled back into the market too. Some higher mileage ones around and if manual will likely need a clutch by 70k a cost most people are aware of. Multiples more 7's sold than 6's so I don't think they will hold their money anything like as well as the previous gen did. The 7.5 with the nice infotainment dash and strobing indicators has aged the 7 a little too. Those that can insure, want the latest, fixed cost motoring will buy or lease new cars. As these get older I think they will fall at least as hard as any other car, especially as they start needing more costly maintenance.

Edited by Tucker1 on Sunday 28th January 08:52

[Wooda80]

KhabibSmesh said:

Completely agree, no way would it drop that low. Golf R's appear to hold their value quite well. Using 25% off each year is just incorrect.

It's quite an eye opener isn't it!

But take a look at what has happened to the car so far:
List price new ( no options ) = £31000
Less 25% after 1 year ( -£7500 approx ) = £23500
Less 25% of £23500 in year 2 ( -£6000 approx ) = £17500

Which is about what MotorPoint will have paid for that car if they are retailing it at £19500.

Like some of the other posters I'd be delighted to be able to buy that car for £8.5k trade / £11k retail in 3 years time, it will be an awful lot of car at that money ( or even another £1000 for one with nav, leather and a nice metallic ).

But most importantly, your original question was to do with how much depreciation you should expect . If you make your purchase expecting it to be worth £15-17k after 3 years then you are likely to be very disappointed when you come to sell it. Potentially disastrous if you are relying on releasing those funds to buy something else. How much better would you feel if you set your expectations realistically and the car turned out to be worth more than you had budgeted for.

Good luck and I hope you enjoy it, whichever one you decide to buy.

Edited by Wooda80 on Sunday 28th January 10:04

Edited by Wooda80 on Sunday 28th January 10:05

[Pistonheader101]

Possibly 14-16k in 3 years time

[Tucker1]

In 3 years time it will be a 6yo car with 50-60,000 miles showing. I would guess at 11-12k on a forecourt and £10k private sale or trade in. Motorpoint themselves give a gfv of just £10k if you pcp with them for 3 years @ 12k pa.

[jimmyt1202]

The values of these in my opinion will drop. As stated, the market is being flooded with base spec models due to ex-lease market. The previous generation held strong due to rarity but that's simply not the case with mk7