Skip advert
Advertisement

"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.

Advertisement - Article continues below

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.

Skip advert
Advertisement
Skip advert
Advertisement - Article continues below

"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...

Skip advert
Advertisement
Chief columnist

Mike was one of the founding fathers of Auto Express in 1988. He's been motoring editor on four tabloid newspapers - London Evening News, The Sun, News of the World & Daily Mirror. He was also a weekly columnist on the Daily Telegraph, The Independent and The Sunday Times. 

Find a car with the experts

Skip advert
Advertisement

Most Popular

Chinese cars can’t match their European rivals when it comes to engineering
Opinion - Shanghai Auto Show

Chinese cars can’t match their European rivals when it comes to engineering

This new brand of cars might have battery tech on their side, but European buyers want much more than that
Opinion
25 Apr 2025
Buying a modern used car for under £10k is almost impossible
Opinion - £10k used cars

Buying a modern used car for under £10k is almost impossible

Phil McNamara discovers that it’s harder than ever to find a good-value car at the affordable end of the market
Opinion
24 Apr 2025
Leapmotor B05 family hatch on route to the UK with sub-£30k price and 400-mile range
Leapmotor badge

Leapmotor B05 family hatch on route to the UK with sub-£30k price and 400-mile range

The Stellantis-backed brand will launch a Volkswagen ID.3-rivalling small car with almost 20 per cent more range
News
23 Apr 2025