A car will be one of the most expensive purchases you ever make. However, in today’s world cars are absolutely vital. They help you get from A to B quickly and comfortably without the hassle of travelling on public transport.
Unfortunately though, cars do lose their value pretty quickly. Whilst some will plummet in value more than others, it’s not uncommon to see a 60% dip in the first three years alone. There are a number of factors affecting this depreciation and whilst you won’t be able to impact some, you can minimise the effect others have.
Even brand new cars will drop in value the second they’re driven off the forecourt. When you come to sell five or six years down the line, your vehicle will be worth just a fraction of what you originally paid for it.
So what exactly is depreciation?
Depreciation affects all vehicles and CAP Automotive suggest this will cost you three times as much as you spend on fuel. Essentially, depreciation is the difference between the value of the car when it was bought, to when it was sold.
The depreciation rate varies depending on the model and make of your vehicle, but as a rough guide you can expect value to drop 15% to 35% in the first year and 50% over three years.
As such, it’s often recommended to keep an eye out for vehicles that hold their value well, rather than focusing on factors such as fuel economy. Of course, one is a short term and the other a long-term gain – so it’s really up to you.
To find out the value of your car, why not try Southern Car Buyers’ free valuation.
What are the best brands for holding value?
No matter if you’re looking to buy a new car or want to know how much depreciation your vehicle has suffered, it’s worth knowing the best brands in this regard.
Below you’ll find the best manufacturers for holding value, as well as their estimated annual depreciation rate:
- Land Rover 20.3%
- Tesla 28.5%
- Maserati 29.8%
- Audi 31.1%
- MINI 31.3%
- Jeep 31.7%
- Lexus 33.0%
- Dacia 33.6%
- Mitsubishi 34.0%
- Mazda 34.2%
What cars hold their value best?
So, as shown above we’ve listed the best car manufacturers when it comes to depreciation. But how about the models themselves? Here are five cars that hold their value well:
The Volkswagen Golf is one of the most popular vehicles on the market, with great levels of efficiency, practicality and reliability. The German manufacturers have turned this car into one of the best selling around the world and its depreciation value is pretty impressive too. After three years a Golf would still be worth 66% of its original value.
The Fiat 500 is becoming increasingly popular in the UK, as a stylish and fun to drive vehicle packing a punch. It handles well and is a great city car. To make things even better for the 500, this Fiat model holds 67.6 of its original value after three years.
The Volvo XC60 is stylish, comfortable and an up and coming rival to the popular Range Rovers and BMW X3. Plus, this SUV is one of the best on the market for holding value; after three years it would have retained 68.1% of the original price.
Audi has built themselves up as a premium brand in recent years and the Q5 builds on this success, with a stylish appeal on the inside and out. This is another SUV to make our list of cars holding their value and the Audi Q5 would still be worth 71.2% after the first three years.
You’ll probably be surprised to see the Ford Kuga near the top of the list for depreciation value and this mid-sized SUV is competitively priced right from the start. There’s loads of space with the Kuga and plenty of great tech in recent models. According to the Telegraph, the Ford Kuga retains 71.6% of its value in three years.
What factors affect car value?
We now know the best manufacturers and models to choose when it comes to depreciation, but what factors will affect the overall value of your car?
The age and mileage of your car
This is going to be one of the biggest contributors to the value of your car, as you probably expect. As such, whoever is buying your vehicle will place a heavy weighting on both of these factors and often they come hand in hand; the older your car, the more miles it has likely travelled. Of course, there’s also the consideration that vehicles with higher mileage than average will also not be worth as much. On average, a car will travel between 12,000 and 15,000 miles a year. More than this and your car will be considered as high mileage. Old cars are more likely to breakdown and if they have a high mileage to boot, this possibility is heightened.
The desirability of your car
If your car has a high desirability, it’s going to be worth a lot more. After all, whoever buys your vehicle will want to sell it on afterwards. If you have a model not in high demand, it’s going to be much more difficult for the dealer to shift. Cars that are always in high demand include the Ford Focus, Fiesta and Vauxhall Astra. They’re particularly notorious for their reliability and people know they’ll not only last a long time but also be typically cheaper to repair if something goes wrong. In general, the bigger and more respected brands will be worth more.
The overall condition of the car
Essentially, the better the condition of your car, the more it’ll be worth. That’s a pretty straightforward conclusion. Therefore, it would be worth carrying out all the little repair jobs before selling. This will help top up the value and means the buyer doesn’t need to pay extra for these to be completed. Make sure to fill the oil, coolant and windscreen wash, whilst repairing any scratches sticking out like a sore thumb.
The colour of your car
This is perhaps a little unfair as your car could be in an excellent condition, but the colour is going to have an impact on the valuation. When you’re buying a new car you’ll opt for something you like, but that doesn’t mean the future buyer will feel the same way. It can be difficult to sell a car if the shade’s a little out there and traditional colours will always help retain value.
Who you sell your car to
Now, one of the most important factors affecting the value is who you sell your car to. For instance, go to a dealer and you’re unlikely to get the true value. However, with Southern Car Buyers we promise a superb price and a quick and easy service to sell your car. Tell us your car registration today and we’ll give you a quote in no time at all.
At Southern Car Buyers, we believe in offering all of our customers a wide range of choice. For that reason, all of our initial valuations are non-obligatory, and if you do choose to trade in your car with our company, then we will offer you a range of payment methods; from a company cheque or banker’s draft to a direct bank payment or even cash in hand upon collection.
If you wish to learn more about our vehicle valuation and trade-in service, feel free to call us on 01708 863732, email us at Support@southerncarbuyers.com, click here you sell your car with Southern Car Buyers or browse through our FAQs Section on our website.