Does anyone have any figures?
Sure, on book price German cars might appear to have superb depreciation and Mondeos very bad, but when you take into account discounts, things look less favourable.
Are there any stats showing depreciation as a percentage of the best discounted new price after 3 years.
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Is that what you really need? I'd be more interested in a likely value at 2 yrs, 3 yrs etc. Then I can just deduct that from what I actually pay to see what owning the thing will cost me in that time.
My suspicion, based on no research at all, is that whatever the arguments about 'depreciation rates', buying a new BMW or Mercedes, say, is still going to be expensive unless you plan to keep it much longer than the typical 3-year finance plan. (Expensive, that is, in terms of actual value lost per year of ownership - which is more or less what Flunky suggests in the first place.)
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Does n't What Car? include a depreciation factor in the stats at the back?
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Does n't What Car? include a depreciation factor in the stats at the back?
It does, but assumes the manufacturer's 'list' price was paid at the outset.
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Does n't What Car? include a depreciation factor in the stats at the back?
Yes, but it's a % of the list price. You have to work out the loss in ££ by factoring in any discount you get.
IMO, thinking of depreciation in % can be misleading. What matters is the ££ you lose. A given car might have low depreciation, but if you've paid a fortune for it to begin with a Perodua can look a much better financial proposition.
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I think it's based on the list price. But you should be able to do the sums on anything you're really interested in - calculate the 3-year value based on the rate and the list price, then subtract it from the 'Target price' they also give you.
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On any specific vehicle, a good thing to do is ask the dealer for PCP quote.
The problem is that Guaranteed Final Value you get as part of the quote will be so low it'll probably put you off buying the car!
The dealer will tell you that's the *minimum* value, and of course your car will almost certainly be worth much more - don't believe a word of it.
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Unfortunately, I'd think a high proportion of WC readers would fail to do any such calculations and be swayed by the 'headline' % depreciation figure - perpetuating (mis?)conceptions of 'low depreciating' brands.
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Unfortunately I'd think a high proportion of WC readers would fail to do any such calculations and be swayed by the 'headline' % depreciation figure - perpetuating (mis?)conceptions of 'low depreciating' brands.
Yes, I totally agree.
In fact, I don't really think there is such a thing as a differential in depreciation figures in reality.
A Citroen "depreciates quickly" because its list price is overinflated in the first place.
The manufacturer prices its cars to match the like of VW, but has no intention of actually selling them at that price. A bit like the "secondary" brands at Currys/Comet -- that Samsung TV will have an RRP the same as the Sony, but it only cost 2/3 to build, and will only be sold at 2/3 the price.
Exactly the same for a whole load of other manufacturers. It's all a bit of a con really.
Companies like the Koreans traditionally came in with lower list prices -- but this simply doesn't work with the so-called "sophisticated" British buyer, as they look at the low list price, and assume the car is going to be rubbish. Recently, Hyundai/Kia have started to fall in line with the Citroen model, and tidy up the perceived quality of their cars, and sell at the higher price. Like Citroen, they know damn well that that is not the price they'll be sold for in the main.
The whole depreciation, perceived quality thing is intertwined. Perceived quality is a cheap con to win over the stupid buyer -- a funky, soft-touch dashboard will add no more than £2-300 to the cost of building the car, yet this is all the average buyer looks at.
And so the con goes on.
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According to Fifth Gear, a Rolls Royce depreciates at £6/mile.
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All cars are worth £100 after fifteen years. Then, if they survive, they start to go up again.
You have the choice of tearing money into little pieces and dropping them one at a time over London Bridge, or burning the notes whole.
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All cars are worth £100 after fifteen years.
You don't see many MX5s of the 90/91 vintage for that price.
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That's because they're 16 years old and on the way up again.
};---)
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In fact I don't really think there is such a thing as a differential in depreciation figures in reality.
There is a difference, just not as much as is claimed. Some of these reviews stating that buyers will "lose £6,000 in the first year" are mind-blowingly stupid, given that they didn't pay full price, and clearly the car is not worth more after 1 year than the buyer paid for it new.
But incidentally the 3-year loss of a 318i is exactly the same in £ as a Mondeo 1.8 (although the Mondeo is higher in % terms).
And the 10-year-old Mondeo, while worth under £1000, has lost less than the 3-series, which is still worth £2-£3k, because the Mondeo was that much cheaper to start with.
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>But incidentally the 3-year loss of a 318i is exactly the same in £ as a Mondeo 1.8 (although the Mondeo is higher in % terms).
Quite. And how many of us get a letter from the bank to say 'You are overdrawn by 42 per cent of the list price of your car'?
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But incidentally the 3-year loss of a 318i is exactly the same in £ as a Mondeo 1.8 (although the Mondeo is higher in % terms).
And just to add, % loss is a meaningless figure. Who cares about the %? £ is what it costs, nobody pays % for their car.
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Of the 10 cars I have owned since 1967, 5 have depreciated and 5 were/are on the other side of the curve. The net depreciation has been £1480. During 40 years I have driven an estimated 500,000 miles.
That works out at £37 a year, or 0.3 pence per mile.
I have not included the Austin A30 I shared at university with five other students. That cost £5, and was sold after three years for £40.
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That works out at £37 a year or 0.3 pence per mile.
Not a terribly meaningful figure, given inflation since 1967.
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Not a terribly meaningful figure given inflation since 1967.
Even allowing for inflation, it's still hardly anything at all.
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I did some analysis on here a couple of years ago (all figures from the Glasses guide at the time) ...
Value of £21k BMW estate
After 1 year £18699.
After 2 years £14319.
After 3 years £11407.
After 4 years £9186.
After 5 years £7200.
Value of £21k Mondeo estate
After 1 year £13143.
After 2 years £9813.
After 3 years £7443.
After 4 years £5724.
After 5 years £4490.
So if you buy a new car every 2 or 3 years, there's almost nothing to choose between them (as long as you make sure you shop at HJ prices and get £4k off the Mondeo).
If you buy your cars at 2 years old, the Mondeo is a much better financial proposition than the BMW if you believe that each has a similar useful life.
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