2:06 pm, May 16, 2014
CAR buyers are being confused about the depreciation in the value of the vehicles they own, according to the experts at CAP Automotive.
The reason is that depreciation is often expressed in percentage terms rather than as an actual amount of money.
Depreciation is the single biggest factor in the cost of owning a car, says CAP. It usually outweighs the costs of fuel, servicing, taxing and even insurance – added together.
But expressing it as a percentage leaves the average car-buyer none-the-wiser about which car is going to lose them more or less money.
CAP analysts looked at depreciation across the UK market over the three years to May 2014. They then published the results in two ways – the percentage of each car’s new cost that was lost over the period and then the 20 cars that depreciated the least in monetary terms.
In percentage terms, the Porsche Cayenne held on to a greater proportion of its initial value than any other car, by retaining 74 per cent of its original cost after three years and 60,000 miles.
But the the smallest cash depreciation was recorded by the Kia Picanto – which lost an average of just £4,010 over the same period and mileage.
However, the Cayenne, the hands-down winner in the percentage stakes, lost an average £11,477 – costing its owners almost three times as much in hard cash.
CAP says the distinction between percentage depreciation figures and real-world cash depreciation is crucial.
Philip Nothard, the organisation’s retail and consumer expert, said: ‘The car industry gets very excited about percentages. But our tip is to ignore the percentages and stay focused on the actual money different cars will lose over time.’
