"For new vehicles, depreciation remains a financial killer"

Trying to buy cars as appreciating assets is doomed to failure, says Mike Rutherford

Mike Opinion - Porsche

If I had a quid every time I was asked 'What new car should I buy?', I'd be about £37,000 richer by now. Listeners to my 1,000-plus radio phone-in programmes (I did one on the BBC only last week), viewers (there weren't many!) of the motoring advice show I hosted (badly!) on TV, plus readers of the car magazines and newspapers I began writing for in the early eighties haven't stopped asking... and I'm still answering.

Some folk don't take notice. Some do. My mate Bob is in the latter camp. Now he's sitting on - or in - his recently delivered, but now second-hand Porsche Macan that's currently worth more used than he paid new. Happy days! This model, like its stablemates the GT3 and GT4, resides in that 0.1 per cent group that makes it an appreciator, not a depreciator - during the early weeks and months of life, at least.

Fastest depreciating cars

Does this mean that private consumers should order and place deposits on future Porsches purely for financial investment? No way. As the company correctly points out, volatile and ever-changing market forces are at play here. Such things are way beyond the control of the manufacturer and everyone else come to that.

"As always, our advice is to buy a Porsche to drive it," the firm says. And in a refreshing moment of honesty, it also reminds us that finance, insurance, servicing, garaging and other day-to-day car ownership expenses can quickly eat into any temporary profit a recently delivered 'new' (but technically second-hand) Porsche may generate for its owner.

Car depreciation: the models that hold their value best

Motorists are often in denial about the rate at which their new cars will (usually) slump or (unusually) increase in value. But my general rule is that over a typical one-to-three year/36,000 mile ownership period, every car will depreciate.

For the customer buying new vehicles, depreciation remains the number one financial killer - the most expensive thing he'll ever 'buy' during his motoring life. Over decades of driving, his depreciation price tags could easily total hundreds of thousands of pounds. If you remain determined to buy a new product, prior to selling it three years later at a profit, visit an estate agent rather than a motor trader. As an investor, what you require is a just-built freehold house with a gas supply, not a factory-fresh car running on petrol, diesel, or electricity.

Would you ever buy a car to make money out of it? Let us know in the comments below...

Recommended

'Power outages do nothing to inspire confidence in would-be EV buyers'
Opinion

'Power outages do nothing to inspire confidence in would-be EV buyers'

Mike Rutherford thinks the switch to an all-electric UK car market hasn't been thought through
29 Nov 2020
'MINI’s brand focus needs to rub off on BMW, too'
Opinion

'MINI’s brand focus needs to rub off on BMW, too'

BMW needs to regain its identity and should look to MINI for inspiration, says Steve Fowler
28 Oct 2020
'The Pop-Up Motor Show is a simple idea at precisely the right time'
Opinion

'The Pop-Up Motor Show is a simple idea at precisely the right time'

Mike Rutherford thinks the new Pop-Up Motor Show can be the perfect way to serve the demands of Britain's car users
11 Oct 2020
'The Land Rover Defender and Aston Martin DBX must be front runners for World Car Design of the Year'
Opinion

'The Land Rover Defender and Aston Martin DBX must be front runners for World Car Design of the Year'

Mike Rutherford thinks cars from Gerry McGovern and Marek Reichman are favourites to win design award
30 Aug 2020

Most Popular

How to transfer a number plate from one car to another
MINI number plate change
Tips & advice

How to transfer a number plate from one car to another

Need to know how to transfer a number plate between vehicles? Our step-by-step guide breaks it down
22 Nov 2020
Best mini jump starter packs 2020
Best jumper starter packs header
Product group tests

Best mini jump starter packs 2020

Don’t get caught out with a dodgy battery as we test eight of the best jump starter packs
18 Nov 2020
New Volkswagen Golf GTE 2020 review
Volkswagen Golf GTE

New Volkswagen Golf GTE 2020 review

Is the new 242bhp plug-in hybrid Volkswagen Golf GTE the pick of the range? We find out...
19 Nov 2020