What is the biggest cost associated with owning and running a new car? Fuel isn’t cheap, road tax can mount up and insurance premiums keep on rising, but depreciation will account for the biggest hit on your wallet. So if you want a cheap car, you need one that will keep hold of its value. After all, there’s no point in having the cleanest engine or lowest tax bill if your new pride and joy will be worthless after three years.
Future resale values - or residual values as they’re often known - are affected by a huge variety of factors and it’s vital to know what they are when choosing your next car. For instance, two seemingly identical cars can be worth vastly different sums of money just because they’re a different colour or because of the engines under their bonnets. Bright colours are good for smaller models as second-hand buyers of city cars tend to be younger and prefer lighter shades. But on bigger models conservative colour choices are likely to guarantee better resale values – ask yourself, when was the last time you saw a fire-engine-red BMW 5 Series?
Go for the most economical engine you can get away with because taxation on the most polluting models is sure to get heavier – and few things deter used buyers like an annual tax disc of £400. The only way to get around this is to reduce the price of your car and that’s not a good recipe for cheap motoring, so efficiency is important for a good resale value.
Keeping your car in good condition is also critical but getting the right model in the first place is even more important, and when it comes to holding onto their new value, here are the best – in percentage terms - in 10 key sectors of the market.
Data: The figures are supplied by VIP Data (February 2013) and are based on three years and 36,000 miles.