It’s a well-known fact that buying a car is one of the biggest investments most people make, second only to buying a house. But let’s be honest – there aren’t many things more exciting to spend your money on.
The thing is, the minute you drive your new car off the forecourt, it starts to depreciate in value. And while you might not be bothered about this at the time, a couple of years down the road when you’re thinking about a trade-in, you’ll be reminded that some cars hold their value better than others.
Low part-exchange offers can come as a nasty surprise, as you might not get as much as you were hoping for. This often comes down to the make and model, but other things affect the price too, including how well you’ve looked after it.
Here we offer guidance on how to find out how much your car’s worth, and a few tips to help you retain its value. Use the links below to quickly find the information you need or read on for the complete guide.
The Importance of Condition
Having an idea of which cars hold value can help you get the best offer when it’s trade-in time. Cars that dealers can move on at a decent profit are always going to attract a better offer than a vehicle with a poor track record of sales.
That said, there are steps you can take to make sure you get a decent offer – regardless of make and model.
Condition is so important when you’re trying to get a good price for your car. These things will add value:
- An average or lower mileage
- A full-service history – preferably with stamps from a recognised garage. Your mate down the road might do decent repairs, but buyers will trust a recognised stamp more.
Kerb appeal is important too, and if your car looks in good nick, people will trust that it’s been looked after under the bonnet. Seasoned dealers will look over the car with a fine-tooth comb, so it makes sense to keep both the exterior and the interior in tip-top condition. This is the one thing we can do ourselves.
There are loads of quality car care products available for almost any job, including things to protect the finish, clean stains off upholstery and keep your tyres looking good, so you can make sure it stays looking its best inside and out. A bit of regular cleaning goes a long way, and you should always do a thorough job before showing it to potential buyers.
Which Cars Retain Value?
Money can be made in the long term if you’re willing to do a bit of research when you’re buying, and find out the average values of different makes and models as they get older.
Car valuation websites are a great place to start, including tried-and-trusted names such as AutoTrader and What Car?. Most will let you get a valuation for free, and some go the extra mile with trade and private sale options with small ads to browse. Check out forecourts, ask around, and arm yourself with as much info as possible.
Remember, though, that it’s not an exact science, and values can change thanks to current trends and things like changes to car tax bands and congestion charges. So, when you’re buying a car, find something in your budget which is generally popular but works for what you need – then take good care of it.
Well-known makes and models usually retain value well due to their evergreen appeal. This goes for manufacturers including Ford, Volkswagen and Vauxhall, German powerhouses like BMW and Mercedes-Benz, and Japanese makers like Toyota, Honda and Nissan – which are well-regarded for their build quality.
But the hard truth is that the majority of new cars lose around a third of their value in the first year; that’s the equivalent of £3,500 on a Vauxhall Corsa. In most cases, by the time the second birthday has passed, depreciation has crept up to 40%. By the end of year three, the cars will have lost an average of 50-65%.
This table shows average depreciation by car manufacturer.
|Manufacturer||Average Value Retained (%)|
The popularity of brands can go up and down, but among the cars on the market right now, the three that retain most value are:
- BMW X3 (retaining just over 70% of its value)
- Skoda Yeti (retaining just under 70% of its value)
- Kia Sportage (68.2%)
Another thing you might want to think about when you’re looking at cars is the current issue with diesels. The emissions scandal and increases in car tax could make used diesels less popular, and there are questions about their value in the future.
Remember – the best way to approach buying a car is to opt for one you really want, care for it, and keep in mind that at some point in the future, you’ll want to sell it on.
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