So, you want a new car? Beware the fast-track depreciation!

Cambelt gear

The latest ‘16-plate’ is now with us and the inevitable waves of interest that lead to a desire to own a replacement, newer vehicle are all-around, states motoring journalist, Iain Robertson, although he urges caution..

While the idea of owning the very latest model can be intense, just bear in mind that the realities of monetary ‘loss’, resulting from a first year depreciation in the region of 40-50%, can place a sobering influence over reaching the decision. Companies are offered sizable discounts, as a means to motivate sales, but the private individual needing just one car will never receive the same incentives.

In addition, the company can offset running costs and depreciation of business-owned vehicles to its taxes, a privilege nor normally the remit of the private buyer. However, it is easy to understand the attractions of the all-new vehicle, not least because it is sold on the basis of offering high fuel economy and lower repair costs. Depreciation is seldom, if ever, mentioned.

Yet, it is the most important factor that motorists elect to ignore, when being attracted to a shiny new paint finish, a fancy, in-built, sat-nav system and larger diameter alloy wheels. It is also true to suggest that not all new models suffer from plummeting residual values, as the following table highlights:

 

 

MODEL: Average retained value after 3 years (%):
Porsche Macan 68
Range Rover 61
BMW X4 59
Audi A1 52