How Well Do New Cars Hold Their Value?

One of the most important factors to consider when buying a new car – yet one often overlooked – is depreciation. The rate of depreciation will have a massive impact on your finances down the line and it is always important to try and find a car that has a slow depreciation rate to avoid losing large sums when you decide to sell. So, what are the best and worst cars for depreciation?

Which cars depreciate the fastest?

There are a handful of cars that are currently losing a high percentage of their value and it is important to keep these in mind when shopping for a new car. The car that depreciates the fastest is the Audi A8, which retains just 33.10% of its value after three years. The Maserati Quattroporte has a list price of £130,140 but only a 3-year resale value of £44,525, which means that it is retaining just 34.21%. Other cars that depreciate quickly include the Fiat Tip (retained value of 34/96%), the Lexus LS (35.12%) and the Peugeot 108 (37.10%).

From a financial standpoint, these are not the best cars to be purchasing brand new and could see you lose a lot of money down the line. A good alternative would be to take out a lease, which allows you to drive a brand new car without having to worry about uncertain depreciation.

Which cars depreciate the slowest?

Fortunately, there are some cars that retain their value well and these are vehicles that are already considered to be desirable. Leading the pack is the Tesla Model S, which retains 63.35% of its £87,475 value after three years. This is followed by the Alpine A110, which retains 62.74% of its value after three years. A few other vehicles that hold their value well include the Jaguar E-Pace (57.6%), the Range Rover Velar (57.02%) and the Skoda Kodiaq (54.19%).

All cars lose value, especially in the first 3 years, but these are a few cars that will retain their value well and result in less of a financial hit when you decide to sell the car.

The best-selling cars

It is also helpful to look at the best-selling cars from last year as these are the ones that are in demand. Obviously, the auto industry is still feeling the effects of the pandemic and subsequent issues like the chip shortage, but there are still some clear favourites in the UK. These include the Vauxhall Corsa (40,194 registrations), the Tesla Model 3 (34,783 registrations, the MINI Hatch (31,792 registrations) and the Mercedes-Benz A-Class (30,710 registrations).

Motorists should always consider depreciation when shopping for a new car as it could have a big impact on your finances down the line. It is best to find a vehicle that retains its value well so that you will take less of a hit when you decide to sell.