When you come to sell your new car on, the painful truth is it's going to be worth an awful lot less than you paid for it. What it’s worth is the residual value, the difference between that and what you originally paid is known as depreciation, and it can be a big factor when you're looking at the total running costs of a car. The impact of depreciation means it always pays to do your homework before you buy.
For example, a car might have an attractively low economy figure and a promising asking price, but if the car is worth £20,000 new and just £5,000 when you want to sell it on then the total cost of ownership could be a lot higher than you expect. That £5,000 used valuation would be known in the trade as your car’s residual value.
As you might expect, some cars hold their value much better than others on the used market – retaining a high percentage of their list price when the time comes to find a new owner. We've put together a list of our top ten best cars for depreciation here, based on latest information from used car price experts CAP.
But first, there are a few things to look for if you're set on buying wisely and want a car that looks after your money.
SUVs and 4x4s are currently the top dogs when it comes to depreciation, with the most fashionable models in this sector staying highly desirable on the used market. CAP tells us that on average, SUVs retain 46.6 per cent of their new price after a typical 3-year ownership period.
Sports cars, luxury cars and executive cars also retain their value well. It’s no surprise to find the latest model from Ferrari vying for honours at the top of our list, as demand so outstrips supply. It’s a similar story for the Alfa Romeo 4C sports car which clinches the 10th spot.
There's not much in it, but the best power option to go for is a petrol/electric hybrid, as these cars retain 39.3 per cent of their value, compared to 38.9 per cent for diesels and 38.3 per cent for normal petrol cars. However those are CAP’s averaged-out figures across the industry, and the differences can be far bigger between diesel and petrol variants in the same model range. Nobody wants a thirsty petrol people carrier when there’s a super-frugal oil-burner available, for instance.
The worst depreciating models by a long way are electric cars - retaining just 17.1 per cent of their new price on average. MPVs and family cars tend to do badly as well, although their retained values are still much better than those of electric cars.
The lists are compiled using the latest information from CAP, and are based on predicted residual values as a percentage of the new price at three years/30,000 miles.