posted 8 years ago

Appreciating Depreciation

Buying the right car, at the right age, can literally save you thousands.

Vehicle depreciation is a cruel mistress – but it can work to your advantage. Buying the right car, at the right age, can literally save you thousands.

The rate of deprecation varies between models. Influencing factors include supply and demand, desirability, and political trends. Generally, inexpensive small cars depreciate gently – whereas executive cars with unfashionable badges plummet.

So, how can motorists benefit from depreciation? The trick is to buy vehicles that have depreciated heavily, but are fairly new. For example, in 2004 a new Ford Mondeo 2.0-litre LX cost £15,600. It is now worth £4,000. Although depreciation in the first four years was £11,600, the vehicle is only likely to drop by a further £2,500 in the next four.

So, to sum up. Vehicles depreciate quickest during the first three years, some losing tens of thousands of pounds. Buying at the 'optimum age' minimises losses and ensures your transport is reasonably modern.