Cars Lose their Value within 3 Years
The latest research shows that new cars are lose up to 65% of their value in the first three years and the new £2,000 car scrapping payments may be a false economy. If you are thinking of taking the Government payment then it may be better choosing a one-year-old nearly new model, as most Cars lose a third of their value in the first year almost equal to £3,500 on a Vauxhall Corsa. Depreciation creeps by 40% by the end of the second year and by the third year cars lose an average of 50-65%, according to research by Brewin Dolphin Investment Banking.
Motorists should consider depreciation as an important factor when looking at the advantage of the car scrapping scheme. Customers should also take their choice of car into consideration before giving away old cars. According to the available data, city cars, such as the Mini, Citroen C1 and Honda Jazz have experienced the least depreciation over three years and therefore can be termed as the best value.
The cars which have the highest depreciation are large expensive petrol vehicles and small vehicles that have their models replaced.
For example, the BMW X5 experienced a drop in value from £45,000 to £20,925, leaving a £24,075 loss. The luxury Mercedes S class saw a greater drop in value of £45,500, from £70,000 to £24,500. The super mini and city cars have performed best in terms of depreciation.
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