One of the biggest drawbacks of buying a new car is the depreciation. Indeed, if you’re buying a new car, you can expect it to lose 40 to 65 per cent of its original value within three years. For many, this puts them off buying a new car: when it comes to reselling the vehicle and upgrading it, you’ll have less money to spend on your next car. However, some cars do hold their value better than others. Below, we explore how different cars hold their value.
Cars that depreciate slowly
If you’re looking to buy a car that depreciates slowly, then a Tesla Model S is an excellent option. Such is the demand for quality electric vehicles that you’ll experience competitive interest when it comes to selling your vehicles. There are plenty of other vehicles that depreciate slowly as a result of the interest in them. The Alpine A110, Range Rover Velar, Mercedes A-Class and Audi Q2 are all among the cars that depreciate the slowest.
Cars that depreciate fast
There are some cars that you should look to avoid if you’re worried about buying a depreciating asset. The Audi A8 is an incredibly popular vehicle, but it also depreciates at one of the quickest rates. Meanwhile, the Peugeot 108 and Fiat 500C are both crowd-pleasing vehicles that also depreciate at a rapid rate. Finally, there are also plenty of high-end vehicles – worth around £100,000 – that depreciate quickly too. The Maserati Ghibli, the Audi S6, the Lexus LS and Maserati Quattroporte are all expensive vehicles that will quickly lose their value once they’ve been purchased. You shouldn’t discount these vehicles purely on their depreciation, but it should be a consideration when making your purchase.
If you’re worried about car depreciation, you can tackle this problem with gap insurance. Gap insurance works alongside your standard car insurance: it covers the gap between the value you paid for your car initially and the cover your insurance provides. For instance, if you purchase a new car and it’s stolen two years later, your standard insurance will only pay the value of the car at the time of the theft. Gap insurance will step in and cover the difference between this and the initial cost of the car. If you paid £30,000 and standard insurance paid out £20,000, gap insurance would usually pay out £10,000. This can give you peace of mind when it comes to depreciation.
Car depreciation can be worrying when you buy a new vehicle. But by taking out gap insurance, you should be protected from any nasty surprises a few years down the line.