Like a leaking pipe in your home, our cars are constantly trickling money. Fuel, tax, insurance and maintenance all play a big part but one that we often forget to consider is depreciation. If you buy a BMW 3 Series for £25,000 today, what will it sell for in four years time?
Now, with most of us buying our cars through PCP finance contracts or good old fashioned hire purchase (HP) agreements we don’t usually think about depreciation because it’s factored into the monthly bill that’s in the contract.
That being said, even though you may not feel the effect of depreciation as directly as you would if you were to buy the car outright and then sell it, you certainly don’t want to be buying any of these plummeting assets, no matter how good the finance deal is!
We’ll kick things off with a car you certainly wouldn’t expect to see on a list like this. This little runaround is reliable, efficient and cheap which are all good reasons to expect it to not lose much of its value as you drive it. However, according to both Whatcar.com and AutoExpress.co.uk, the little 108 is up there with the worst.
Our friends over at Whatcar.com reckon that over a 3-year period, after the car has driven around 36,000 miles, it will have depreciated by around 75%! With a list price of around £13,670 and an average resale of £3,425, the car would have lost around £10,000.
AutoExpress says that 3dr hatchback 1.0 Allure models of the Peugeot 108 suffer the worst depreciation. This is likely due to it being one of the highest specs for what people consider as a cheap little runaround. The Citroen C1 also sees similar drops in value, so watch out!
Here’s another reasonably-priced car you wouldn’t expect to be one of the worst depreciating cars on the market.
Most people don’t even know what a Tipo is, and that may be part of the reason why it’s worth nothing when it comes to selling it. It’s basically a Ford Focus, but nowhere near as popular.
New, a Tipo will cost around £17,000 to buy. Used, a 3 or 4-year old Tipo will cost you around £5,000 to buy with around 55,000 miles on the clock. A great bargain, but a very bad investment when buying new.
BMW 4 Series Convertible
For some reason, depreciation is not kind to this beautiful hardtop convertible. You can pick up a pretty good 2015 example of one for just £14,000, despite them costing £40,000 new! The ‘Sport Professional Media 420d’ model depreciates particularly bad, with the value after 3 years being as low as £13,000. That’s a rate of 70% depreciation from the original list price of £44,520.
This large luxury saloon demands respect. This car has the executive look and whoever is inside of one is bound to feel important. However, although it demands respect, it doesn’t demand a very high price on the used car market.
For example, the Jaguar XJ Luxury LWB 3.0 V6 Diesel costs £65,360 new. After 3 years of wear and tear and an average amount of driving, it’s suddenly only worth around £20,000. Autocar suspects that this is due to the model’s long lifecycle and that it has now been overtaken by newer, fancier alternatives.
This tiny hatchback is all-electric, which already puts it at a disadvantage when it comes to holding its value. On top of that, the battery’s range is just as tiny as the car itself, making it increasingly obsolete as the years progress and battery tech continues to evolve.
Furthermore, the interior looks about as sophisticated and refined as a child’s toy thanks to all the awful plastic. All of this adds up to a car that was originally worth £29,000 (overpriced to begin with) to be worth just £7,000 after a few years. 2015 examples with around 35,000 miles on the clock can be snapped up for as little as £6,500!
If you’re looking to throw away as much money as possible in the shortest amount of time, look no further than prestigious luxury cars. The Bentley Mulsanne starts from £238,700 and after just a few years, let’s say three, that price will drop to around £100,000, depending on the spec.
That’s a whopping £140,000 that’s simply vanished. Why’s the price drop so much? Well, what kind of peasant want to sit in a pre-owned vehicle. Just the thought of someone else previously owning the car that you own must really make these rich people squirm.
So, what’s the moral of the story? Don’t buy a Fiat Tipo. I mean, why would you do that anyway?
If you’ve got any depreciation horror stories, let us know in the comments!
If you enjoyed this, why not read about how most people apparently think P plates should be made a legal requirement?
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