Depreciation

[st13phil]

OK, I confess it: the weather's rubbish, I have a horrible cold, and I'm bored

Now, we all know that depreciation is the single largest cost of car ownership and one of the "benefits" of Mercedes ownership is that they hold their value better than many, so I whiled away 5 minutes of my time playing with the What Car? Depreciation Calculator because I thought it would be amusing to find a few makes and models that don't do so well. All the numbers quoted below are calculated from that calculator.

As a benchmark, an E-Class E350CDI Avantgarde Saloon retains 45% of its initial value after 3 years. We all know that first year depreciation is heaviest for any car though, and this one loses 33% of its initial value in that first year - which is why ex-demo cars should be such good value.

Now, we're all told that small hatchback's retain their value well so what about something mundane like a Toyota Yaris 3dr 1.0 VVT-i T2? That manages to retain 41% of its initial value after 3 years, and it loses 39% of its initial value in it's first year. So, proportionally, the E350CDI Avantgarde Saloon does better at both 1-year and 3-year milestones - although the monetary loss is obviously much larger as it costs more than three times the price of the Yaris to start with.

OK, now for some fun. Here are the worst two cars I found for first year depreciation:

1. The Cadillac CTS 3.6 V6 Sports Luxury Saloon manages to shed an eye-watering 71% of its £45,241 purchase price in it's first year. That's a whopping £2.68 in depreciation for every mile that an average driver would cover in those first 12 months At three years old, it manages to retain just 19% of its initial OTR price
2. Then there's the Citroën C6 3.0 HDi V6 Exclusive Auto Saloon which loses 76% of its £40,160 purchase price in the first year or a mere £2.54 / mile over 12,000 miles (!), and at three years old, it retains a whole 16% of its initial OTR price

So, who can find any other "star" performers?

 

[davidjpowell]

According to Pistonheads Citroen sold 4 C6 vehicles in 2011. Bit poor really.

 

[st4]

Depreciation being the largest cost of car ownership...

I've worked out I've gone through £7500 fuel and lost £9k in depreciation. I did toy with a 500 or AMG and that fuel would be greater than the depreciation.

Factor in fuel + repairs and maintaince + insurance and my depreciation bill is less than the sum of that.

 

[Deleted member 37751]

I would hazard a guess that the biggest car depreciators will be, or have, the following;

American
Big-engined yet gutless
Perceived lack of quality

 

[Scott_F]

Then there's the Citroën C6 3.0 HDi V6 Exclusive Auto Saloon which loses 76% of its £40,160 purchase price in the first year or a mere £2.54 / mile over 12,000 miles (!), and at three years old, it retains a whole 16% of its initial OTR price

That's what happens when you spend £40k+ on a new Citroen.

 

[wemorgan]

Proton Savvy Hatchback 1.2 Style 5dr 72%
Ssangyong Rexton 4x4 270 S 5dr 71%

I would hazard a guess that the biggest car depreciators will be, or have, the following;

American
Big-engined yet gutless
Perceived lack of quality

Mercedes-Benz CL Coupe CL65 AMG 2dr 64%

 

[nurple]

According to Pistonheads Citroen sold 4 C6 vehicles in 2011. Bit poor really.

And 2 of those were probably to the French Embassy!

 

[scottishv8owner]

I brought an E63 AMG just before Christmas (on an 07 plate) and I worked out it it has depreciated by around 1k PER MONTH by the time I got hold of it.

If anyone buys one of these new they must be mad, or be an executive at RBS

 

[Harrythedog]

The depreciation factor only seems to work one way and that's when you trade it in. Try buying a 12 month old E350 at a main dealers with 39% off list price!

 

[Dieselman]

What nobody has factored in here is that you will get much larger % discounts on a new mainstream model car than a E350Cdi and the E350 Cdi value is only being held up because it's a new model and the 350 engine is only recently available.

For the first year after launch W212 lost virtually no money at all, then they have started to slide quickly as supply has eased.

Look in 2 years time, they will be peanuts.

20+ years ago one of the car mags did a similar exercise with a BMW 3 series and Vx Carlton.
Against the list price it was found the Beemer won hands down, but once the initial discount was factored in the Carlton was streets ahead in both % and cash terms.

 

[st4]

Its not really a big deal the % loss. Its the net figure that I lose I am interested in. If I buy a £30k new C class and I get 50% back, I've lost £15k. If I buy a £15k focus and lose £9k I might have lost more relatively, but in actual fact I've lost real in monetary forms.

People rabit on about buying a large engined petrol car used for the price of a new diesel as its a better buy as it cost more new. So what, you pay the same for it so who cares what it cost then, its what you pay and lose that counts.

My car cost me £15k. I couldn't care whether it was £25k or £45k when it was new. It cost me £15k and for 38,000 miles driving has lost £9,000 in 18 months. A new car would have done better in deprecation maybe, but I wanted a large car and I had to take the costs of such a vehicle on the chin.

 

[Harrythedog]

I don't think the 20% VAT rates have helped matters either

 

[raymont]

As has been said starting with list price gives a false impression. Not many cars are purchased at full list. Starting point needs to be a realistic price.

Cars like MB. BMW, Audi etc usually have expensive options specified, after three years these options have little or no residual value making depreciation worse.

If you doubt this visit an MB showroom and get a lease price for a standard spec car, then add an option, for most options the extra lease price will be the cost of the option spread across the period of the lease.

 

[Remenham]

Depreciation remains the largest cost even when you keep the car a long time and do quite a lot of miles.

My s210 320cdi Avantgarde cost me £34,938 new in November 2001 after a £1,000 discount.

I have just traded it in for £2700 against an s211 at 150,500 miles.

Diesel cost over the period at 37mpg £25,888 at today's price of 140p litre.

Depreciation £32,238.

Total servicing costs £6,789.82 (6 at MB, 5 at indie).

No costs outside normal servicing except de-rusting at MB expense and two new injectors at 149,000 miles.

 

[raymont]

Depreciation remains the largest cost even when you keep the car a long time and do quite a lot of miles.

My s210 320cdi Avantgarde cost me £34,938 new in November 2001 after a £1,000 discount.

I have just traded it in for £2700 against an s211 at 150,500 miles.

Diesel cost over the period at 37mpg £25,888 at today's price of 140p litre.

Depreciation £32,238.

Total servicing costs £6,789.82 (6 at MB, 5 at indie).

No costs outside normal servicing except de-rusting at MB expense and two new injectors at 149,000 miles.

Without really analysing your numbers it looks as though this indicates that you can run a quality car over about 10 years for less than the cost of replacing a less expensive cover every three years or so.

 

[st13phil]

As has been said starting with list price gives a false impression. Not many cars are purchased at full list. Starting point needs to be a realistic price.

That's absolutely true, and the huge year one depreciation that we suffer on new cars is a largely UK phenomena driven by discounting and the distortions caused by the fleet market which indicates that list prices are artificially inflated. But that's another story...

 

[renault12ts]

Depreciation remains the largest cost even when you keep the car a long time and do quite a lot of miles.

My s210 320cdi Avantgarde cost me £34,938 new in November 2001 after a £1,000 discount.

I have just traded it in for £2700 against an s211 at 150,500 miles.

Diesel cost over the period at 37mpg £25,888 at today's price of 140p litre.

Depreciation £32,238.

Total servicing costs £6,789.82 (6 at MB, 5 at indie).

No costs outside normal servicing except de-rusting at MB expense and two new injectors at 149,000 miles.

Interesting. My car cost £5000, three years ago. It now has 112,500 miles. If I got £2700 for it, the depreciation would be 46%. A high %, but only £2300. Cheap motoring.

 

[Remenham]

Interesting. My car cost £5000, three years ago. It now has 112,500 miles. If I got £2700 for it, the depreciation would be 46%. A high %, but only £2300. Cheap motoring.

I agree . Anyone who buys my old 210 and gets 2 or 3 years out of it without major engine/gearbox trouble will have superb value.

 

[Red C220]

I don't think the 20% VAT rates have helped matters either

VAT is often overlooked in these calculations.

A car (in theory) instantly loses 20% the moment you sign on the dotted line.

I thought Ferraris were a shocker for depreciation, particualrly 4 seat front engined V12 Autos. The 456 was legendary for depreciation.

I still look through the used car adds and hanker after a black over black 456M GTA.

 

[John]

Then there's the Citroën C6 3.0 HDi V6 Exclusive Auto Saloon which loses 76% of its £40,160 purchase price in the first year or a mere £2.54 / mile over 12,000 miles (!), and at three years old, it retains a whole 16% of its initial OTR price

Now there's a surprise...



It's got comfy seats though I understand.