Buying a car is a big life purchase. The only bigger cost in life is buying your home. When you buy your house, the value usually goes up. If you buy a brand new car, you lose huge amounts in the first year alone. Buying used is the only way to protect you against this hidden and often neglected cost.
When you buy new, you lose money straight away
As soon as you drive a new car out of the showroom, you’re instantly losing money. According to WhatCar, on average 20% of the value of the vehicle is wiped off immediately. So, if you’ve spent £25,000 on a car, you’ve instantly lost £5,000. Apart from a crazy bet in a Las Vegas casino, a moment of madness at the races, or literally burning cash, there are few easier ways to spend money so quickly.
Buying used is a good way to shield you against the cost, as the biggest chunk of a car’s value is lost in the first year. On average, the first year depreciation cost is 40%. According to the AA, after 3 years your car will have lost 65% of its value off the list price. So, it doesn’t take a genius to work out that you’re losing less money by purchasing a car after the first year.
The depreciation costs of 5 top saloons
Saloons see some of the largest depreciation costs of all over the first year. Here’s what it’s going to cost you for some of the biggest saloon cars out there:
Average 1 year depreciation: 40%
The 3-series is right at the top it's class. Last year the car was the most popular used car purchase. And, if you look at the figures, it's not difficult to see why. If we take the 320d M-sport as an example, in the first year alone the car will depreciate by as much as £15,000 if you buy new. Whereas in the following 3 years it'll lose less than £9,000.
Average 1 year depreciation: 25%
This compact executive saloon from Mercedes is as smooth as they come, perfect for getting you around town in style. Plus, it's better at holding its value than an equivalent 3-series. However, even if you go for the middle of the range C180, you're still losing around £7-8,000 when you buy new. With any Mercedes, the car will go on to hold its value extremely well in comparison to most manufactures out there. This is in part down to the exceptional levels of engineering and build quality that the Stuttgart-based manufacturer is renowned for. Obviously, this longevity is another great reason to buy a second-hand Merc.
Average 1 year depreciation: up to 50%
The second Beamer on the list, the 5-series is often credited as being the number one all-rounder, whatever car you're after. If practicality, refinement and sheer feel of the road are all on your checklist, there really is no beating this complete saloon car. In terms of depreciation, a new 5-series can lose up to half of its value in the first year, meaning if you opt for the 530d M Sport 4dr you'll lose around £19,000. The costs of depreciation really starts leveling off after the first year. Are you not someone who commits themselves to one car for life? You're going to be able to recover much more of your investment if you opt for a used equivalent.
Average 1 year depreciation: up to 52%
The Ford Mondeo is one of the best mainstream family saloons available. And, while it provides any owner with fantastic ride, responsive drive and Ford's cutting-edge 'kinetic' design, the value for money when buying new fairs significantly worse than more premium German counter-parts. For example, if you take the 2.2 TDCi Titanium 5dr, with a new price of around £22,200, the value after a year can fall by as much as £11,000 (50%!). With more mainstream models you really pay the price for buying it new. Again, the increase in depreciation really tails off after the first year, meaning it makes a lot more sense to buy your next Mondeo used. You'll save £1000s...
Average 1 year depreciation: 20%
The Passat, like any VW, has a proven reputation for being somewhat of a 'steady Eddy' in the depreciation stakes. However, even with the exceptional reputation for robustness and reliability that marks the German company out as a great investment, you'll still lose out. Taking the 2.0 TDI 140 Bluemotion 4dr CC as an example, you'll lose £6,000 in the first year when purchased new from a dealership. Whereas in successive years, the Passat's depreciation reduces significantly. This means you'll lose less when it comes to selling it on.
The stress-free way to buy used
One of the main reasons people end up opting for a new car is that you’re not faced with dodgy used car dealers. Buying new usually feels like a much more trustworthy process. Another consideration is the warranty packages that often come with a brand new model. Carspring brings all of the reassurance of buying new, without the huge cost of first year depreciation. Or, in fact, even having to visit a dealership.
We stock a range of high-quality, independently-inspected used cars - including some of the models with the lowest depreciation costs. What’s more, when you buy with Carspring, we sort out all of the paperwork and deliver your car directly to your door. Plus, when it comes to guarantees and warranties, we’ve got you covered. All our cars come with a 14-day money-back guarantee, a 6-month AA Gold Warranty and 12-months' AA breakdown cover. A new car buying experience. A used car that feels like new.
*Prices based on WhatCar depreciation index