Why Cars Depreciate at Different Rates

Trying to get your head around depreciation can be a bit of a mindfield to say the least!

If you buy a mass-produced car from one of the well-known car manufacturers, when the time comes to sell your car there are more than likely going to be lots of other people selling the same car at the same time as you.

Alternatively, if you have a rare or limited edition car, when it comes to selling it you could have lots of interested parties all outbidding each other to buy your car, therefore bumping up the price.

So part of the challenge is trying to figure out which cars are going to hold their value well.

Trying to guestimate your car's depreciation.

The best trick is to go online and see how much one-year-old versions of your car are selling for. www.autotrader.co.uk may be a good place to start!

If you are looking at buying a new Renault Clio, go online and look at what a one-year-old similar Renault Clio is selling for. Take this away from the price you are about to pay for yours and it will give you an indication of how much your car will devalue in the first year. If you are planning on holding on to it for three years, check what a three year old model is selling for. Remember, sometimes it loses most of its value in the first year and then the drop in price can tail off.

Still got your heart set on buying new? If you have factored in depreciation and are still happy to go ahead, then at least you won’t get a shock when you go on to sell it and find out that you can only get a lot less than you originally paid.