Car Value - A Bit Fishy?

Unfortunately cars depreciate, or lose money, as soon as they leave the dealer's forecourt and continue to be worth less every year. The typical rule of thumb is that 15% - 20% of the value is lost per year, which is why it can make sense to buy a used car, once the majority of initial value has been lost. Use Price Any Car to help with your car buying experience.

The depreciation in the first year can be even steeper than this which is why many people buy 1-3 year old cars. This steep drop in year one is basically because the dealer sold the car at or near to retail price and as soon as you take ownership it is now only worth wholesale price, or the money a dealer would pay to take it back on which they can still make a profit selling it on.

There are exceptions however they are few an far between such as the new model Mini. Shortly after launch there was such demand and lack of supply that one could purchase a new Mini and immediately re-sell it for more than retail price!

Depreciation rates can vary quite a bit depending on the make of car, for example your average Ford or Vauxhall depreciates faster than a more premium make such as a BMW or Audi. This can mean that if you plan to hold onto your car for a long time, then buying premium makes can help to reduce the overall cost of ownership and conversely that buying 3-5 years old can mean picking from heavily depreciated bargains.

Top tips

• Cars depreciate the most in year one
• Subsequent years lose 15% - 20% each year
• A five year old car is typically worth 30-40% of the new sticker price
• How much your car is worth is down to a number of factors