In the latest survey by Alliance & Leicester the 3 series BMW comes out top with the lowest depreciation over 3 years losing just 29.8%.
It was good to see the Rover 75 in 5th position, losing only 34.2% over the 3 year period.
Bottom was the Renault Laguna which lost a massive 68.9%, followed closely by the Nissan Primera and Ford Mondeo, which both lost over 66%.
There is no question that depreciation is the greatest cost of car ownership when buying new, but the Mondeo makes a great buy at 3 years old.!!!
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Where did you find the list? I tried the A&L site but could only find sector info!
Thanks.
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These lists pop up from time to time, but they don't really tell the whole story. They compare new list price with book price at three years. In reality, very few people will pay anywhere near list for a new Mondeo or Primera. Indeed, I have seen brand new Primera 1.8S for about 10k.
Most BMW buyers will, however, pay list (or very close to it). I suspect that if you do a computation based on actual price paid then the outcome will be a lot less clear cut.
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Spot on Aprilia. Also it is very dependant on what you're buying next, if it is a desirable rare car, they wont offer you much, if it is more common or they need to sell a lot more of them, then they'll give you an excellent price.
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A good point, but in practise it is still a big consideration.
for instance if you brought a Primera for £10k it will still keep on depreciating on a big way, not just for the initial nearly new discount.So you may have saved money initially but will just lose more than the equivalent BMW over the following same term of ownership
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A good point, but in practise it is still a big consideration. for instance if you brought a Primera for £10k it will still keep on depreciating on a big way, not just for the initial nearly new discount.So you may have saved money initially but will just lose more than the equivalent BMW over the following same term of ownership I just cant believe this.
Surely the most you can ever lose on this Primera is £10k whereas in 5 years you will lose say 15k on a 3 series costing originally £26K.
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The fact is that cars dont just depreciate at different rates up to 3 years old and then depreciate at the same rate. They still depreciate at different rates.
e.g a 1998 318i would cost about £11k. A 1998 Primera would cost about £3k. They weren't £8.5k different when both new. more like £5k. So the Primera will still depreciate faster. Its all relative. You may have saved initially but will still lose more over the same ownership period.
Thats the rules of supply and demand for you.
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But a 1995 318 would cost about £2.5k, the primera £1k difference is now £1.5k.
Over that ownership period you would lose far less in the Nissan.
I guess the key is finding the optimum time to buy and sell. This will obviously be different for different makes.
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The fact is that cars dont just depreciate at different rates up to 3 years old and then depreciate at the same rate. They still depreciate at different rates. e.g a 1998 318i would cost about £11k. A 1998 Primera would cost about £3k. They weren't £8.5k different when both new. more like £5k. So the Primera will still depreciate faster. Its all relative. You may have saved initially but will still lose more over the same ownership period. Thats the rules of supply and demand for you.
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Where does a 1998 318i cost £11k? Just looked on Parkers and the most expensive (318SE Auto) comes out at £6.5k dealer retail. 2.0i top-sepc. Primera comes out at about £3k.
Incidentally, in summer '98 I bought my wife's Primera 2.0i from a Nissan dealer as an ex-demo (three months old and it had about 2k miles on it), we paid just short of £10k and list at the time was £16.7k - but I doubt many people ever paid that. A 318i at the time was the best part of £20k !!.
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I read somewhere that the 3 Series now outsells the Mondeo. Will the resultant increase in 2nd hand supply push down 2nd hand prices, or are we all so brand fixated that high demand will keep prices up?
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A good point, but in practise it is still a big consideration. for instance if you brought a Primera for £10k it will still keep on depreciating on a big way, not just for the initial nearly new discount.So you may have saved money initially but will just lose more than the equivalent BMW over the following same term of ownership
Sorry, but I can't agree with your arithmatic. Having owned a BMW from 'almost new' to disposal at about 3 years I can confirm that percentage-wise against list price you will lose less than on a Mondeo against list price. Cash-wise and in the 'real world' the BMW will cost you a lot more in depreciation.
I think I lost more in three years on a BM than the outright cost of a nearly-new Mondeo from a supermarket (i.e. I could have bought the Mondeo, scrapped it at three years and still been a few quid in pocket viz a viz the BMW).
Bear in mind that there are 2.0i Mondeo 6m/6k sitting around at £9.5k.
Moreover I am not convinced that the BMW will maintain its position in the league - they are around in great numbers now. I notice that MB C-class residuals are starting to look a bit sickly too, probably because of over-supply - a shame, since I own one!
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There are NO winners when it comes to depreciation!
(Prepares to have this statement picked apart!)
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There are NO winners when it comes to depreciation!
I bought a 7 year old Xantia TD (with only 70k miles) for about 10% of its new price. Makes me FEEL like a winner!
--
RichardW
Is it illogical? It must be Citroen....
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Agree in the main but there are exceptions.
Bought a high mileage MX5 in the winter. Sold it 2 years later having only added 9k for about the same price.
However, I am no expert. Current car I own I know I'll lose a packet. Previous UK car (S40 T4) bought for 20k sold 14 months (15k miles) later for 11k (after 3 sets of front tyres!). Major loss.
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And JAJ, IIRC, the last Alliance & Leicester survey said that the Volvo S40 was THE lowest depreciator in its class...
Even if you can afford £20k, you still can't ever lose more than £10k on a £10k car, and meanwhile you can stick your spare £10k where it'll grow. Makes decisions tricky for a pikey like me!
Always made me chuckle: - was it Kia's? - forthright advert:
"If you want a status symbol, buy a Rolex with the money you saved."
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Bring back the days of high (15%) inflation - bought a Maxi in 1972 for £735, sold it 2 years later for £795 (both privately). Was that a gain or a loss?
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I would say it is Guiness Book of Records material myself!
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Aprilla - if my memory serves me correctly you ran a 7 Series BMW, which depreciates at a horrendous rate and is therefore not a fair comparison in your arithmatic with a Mondeo.
This survey refers solely to the 3 Series, and I would guess the 7 Series must be close to the bottom of the depreciation league.
I agree that if sales of 3 Series continue to outstrip the Mondeo, then it is only a matter of time before the supply of used vehicles will exceed demand and that residuals will then slide.
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Other thoughts for the melting pot:
34% of 28K is no different from 66% of 14K (typical respective prices?). So actually depreciation is the same for both!
Ultimately, through many years of ownership, you'll lose far more owning a BMW than a Ford, because they're more expensive in the first place!
Splodgeface
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well I look at real cost per mile.. fuel/servicin/ insurance and depreciation.. (tax the same ).
Anything over 50p a mile from new is just like tearing up £ notes..
Each to their own.. WOuld I spend £20k on anything and sell it for half that 3 years later?
I don't do it on shares (the reverse is true i.e buy at £10k and sell at £20k and hopefully not in 3 years.. 3 weeks/months is better:-))
So I won't do it on cars... Mind you that's why I retired at 52:-)
madf
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If you read our Great Leader's auction report there is a wave of used BMW 3 series coming at us that could sweep away all previous assumptions...
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Actually, the prices that 51 plate Compacts seem to go for retail are absolutely insane, given that a new one with half-decent ES spec can be had for a smidgen over £15k.
Also, does anyone know where I can get a realistically specced, UK supplied, 3 Series saloon for £18k, which is what A&L seem to quote? I reckon £19k would be a result. Even if you can get £12,500 privately for a 40k mile, three year old, you get 35% depreciation on £19k - or £6,500.
Similarly, £11,500 is more like the real transaction price for a Laguna. And £6,500 is more like it if you want a new shape Laguna, rather than one of the last old shapes that were just hanging on three years ago. That means that the Laguna's depreciation is 44%, or £5k.
So yes, the Laguna depreciates more in percentage terms but in absolute terms, even buying new, it's about £1,500 cheaper over three years. That's a tenner a week, without the interest on the £6,500 you've saved over the BMW, so not at all an enormous amount if you want the BM - but given that the survey is designed to highlight financially sound choices, as well as providing publicity, I'm not so sure that the press spin on it is worth much at all.
(Mind you, as I think I said six months ago the last time one of these surveys came out, the new shape Laguna is now at a very favourable point in the depreciation cycle and in three years' time, it won't be, so maybe there happens to be a bit of truth in the survey after all.)
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I've only ever bought one new car in my life.
I bought a MB SLK 200 in 2000(Y) , paid 25K but got 4K trade in for a car I thought was worth 3K private. Sold it back to the main dealer after 2 years for 19K after exactly 2 years.
It cost me 5K for 2 years of great fun. I'm sure I would have lost the same amount on a new Focus or similar.
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Its worth remembering that some expensive cars might loose less money over a short period, however you had to pay the money for them in the first place and have lost the interest on that money.
So looking4car (using as example) with his £21000 more than his trade in, has lost £2600 in interest in two years (if the interest rate was 6%, which is what you could get a few years ago). If you work it out over longer periods it would cost far more. Having said that, if you worked everything out like this you would never spend any money at all.
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The lowest cost/depreciation motoring is to buy a near bottom-of-the-range Golf/Civic/Corolla (good image/quality) at the cheapest price you can (hello, on-line brokers).
Golf-class cars are always popular s/h buys, and those 3 have the best residuals.
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Chuffed to bits that the Rover 75 is amongst the least depreciating. I got 25% off when I bought it and it's the more popular 131Ps CDT. So I'm not going to lose a lot in the next two years of ownership which is going really well, it's a real pleasure to drive.
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If anyone wants to read the full report, the link is here
www.alliance-leicester.co.uk/smartermotoring/carpr...b
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I read somewhere (may well have been here) that when buying new it is best to buy one up from the base model in terms of spec and engine size (e.g. 1.6LX instead of 1.3L) to get the best trade in value in the future.
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