Your Cars Losing Money, But How Much?

What are the biggest costs when you buy a new car? Insurance? A warranty? Servicing? Or the cost of fuel?

In many cases, the answer to this question is ‘none of them’. For millions of drivers, depreciation is the biggest factor that affects the running cost of a new car. Simply, depreciation is the difference between the amount you spend for a car and the amount you get back when you sell it.

The AA says that ‘for many, depreciation is the single biggest factor affecting running costs adding more to cost per mile than fuel.’ In our guide, we look at the factors that make your car depreciate in value and what you can do to help. We also list five of the worst cars you can buy if you want to retain a good resale value.

Most new cars depreciate in value between the time you buy them and the time you sell them. The drop in value varies between makes and models, but typically is between 15 and 35 per cent in the first year and up to 50 per cent or more over three years.

The most common factors that contribute to your car’s depreciation are:

While a lot of the above factors may be out of your control, there are a number of things that you can do in order to maximise the second hand value of your car. These include:

At the end of 2013, MSN Cars undertook some research to find the worst depreciating cars on Britain’s roads. If you’re looking to avoid huge depreciation costs, here are five of their top 20 cars that you should avoid.

The Renault Espace was the second worst performing car in terms of retaining its value. The Espace retained just 12 per cent of its value after three years with an average depreciation of £22,182.

2. Chevrolet Lacetti Estate

Many of Chevrolet’s models appear on the ‘worst depreciation’ list but the Lacetti Estate performed worse than the hatchback. It retained just 15.3 per cent of its value after three years.

3. Citroen C-Zero

According to MSN, in cash terms the Citroen C-Zero suffers from the worst average depreciation of any car in the list. Its average depreciation over three years was an eye-watering £27,875.

4. Peugeot 807

MSN says that ‘big French cars suffer from notoriously steep depreciation’. The Peugeot 807 loses £18,225 after three years and 60,000 miles and retains just 16.5 per cent of its new value.

5. Vauxhall Astra Hatchback

The Vauxhall Astra is one of the most popular cars on Britain’s roads but the hatchback model retains less than a fifth of its value over three years. The average depreciation was £15,267.