Car Depreciations Hit Consumers on Top of Petrol and Insurance Price Hikes

Motorists in Britain are losing as much as £510 every month in the depreciation value of their cars according to a study carried out by price comparison site uSwitch.com. This is a monthly increase of £13 over a six month period.

The findings highlight the rising costs of motoring in the UK, with millions of people already feeling the effects of soaring fuel prices and insurance premiums. It has been estimated by uSwitch.com that an average of £9,800 will have been wiped off the value of a new vehicle in its first four years. 

Of the top ten selling cars in 2007, each one fell in price by an average of 43 per cent, which equates to £6,124 in the first year alone, leaving consumers a total of £5 billion out of pocket.

Depreciation levels can be affected due to a variety of factors, such as the popularity of the vehicle, the number of cars manufactured and the perception amongst consumers about the quality and value of the brand.

Research has revealed that cars begin to lose there value at a faster rate after their first birthday, hitting a deprecation level of 54 per cent after the second year of the vehicle being purchased. The level will have reached 61 per cent by its third year on the road and a 68 per cent depreciation level by year four.

Hardest hit of all the new car buyers were Vauxhall Vectra 1.9 CDTI owners who saw their vehicles depreciate by 58 per cent during the first year. By the fourth year the car had lost 75 per cent of its value. Consumers who bought this model in 2007 will have suffered a combined loss of more than £550 million.

The brand that suffered the least depreciation was the BMW 325d SE Coupe, with a price tag of £30,000, saw a loss of 25 per cent during the first year and 56 per cent by the fourth year.

Eco-friendly drivers could not only help to save the environment, but they could also help to save themselves some money too. Not only can ‘green’ cars save the owner running costs of £300 a year, they will also see lower depreciation costs over standard cars.

The eco-friendly Volkswagen Polo BlueMotion which comes with a price tag of £12,720, lost just 38 per cent of its value in the first year, which equates to £4,846. By year four the level was 64 per cent with a depreciation of £8,123.   

Insurance expert at uSwitch.com, Ashton Berkhauer said, “Buying a brand new car is an exciting moment, but in reality it’s not as simple as just driving off the forecourt and onto the open road. For most people a one year old car represents far better value for money as this is the period when the bulk of any depreciation takes place.”  

Berkhauer went on to say, “The amount of money lost on a car in the first year does vary from one brand to another but the Vauxhall Vectra clearly takes the number one spot with over half of the car’s value disappearing after just 12 months. Buying a brand new car is a big expense so it’s really important that people do their homework and find a car that will give them value for money. In addition to this, motorists need to think about the cost of insuring the car before they hand over the money.”