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How does deprection work???


rs2k2008
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Im saving my hardest to fund a mk1 focus rs ( yes have finaly made a decision) if i carry on saving at the rate i am could pos afford to buy one in sept/oct time. What im asking is, if i waited a till next summer would there have been a significant price drop?

 

Never really had cars of high value really, so not sure on how deprecition value and all that works. Hope people can spread a bit of light cheers?

 

 

:cheers:

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Google is your friend....

 

What is depreciation?

 

Depreciation is the term used for the decrease in value of a car over time.

 

It is often measured as a percentage of a car’s value after three years or 36,000 miles, compared to its price as new.

 

A car with very heavy depreciation could be worth 30 per cent of its sale value after three years, while a car with low depreciation may retain 75 per cent.

 

For many depreciation is the greatest hidden cost of motoring, because it only becomes apparent when it’s time to sell a car.

 

 

 

The least depreciating cars

 

The cars which lose the least value over time are either the best in their class, highly sought after or rare.

 

According to a recent study, BMW’s Mini is currently the slowest depreciating car on sale in the UK because it is in high demand.

 

Ferrari, for example, always builds one less car than it believes it can sell, building 399 Enzos when it judged the market to be 400. The reason is to keep demand high.

 

“If you manage to buy a Ferrari F430 or an Audi R8 today you could sell it tomorrow and make £10k or £15k profit,” says Used Car Roadshow TV host Jason Dawe. “People will do anything to get them.”

 

 

 

How to avoid depreciation

 

Motor industry expert Jay Nagley warns buyers to be careful while choosing a car.

 

“Don’t get wowed by discounts, they are often there for a reason. Think why a car may have had its price cut,” says Jay Nagley.

 

“Don’t buy a car if it’s just about to go out of production, it’ll soon be dated and out of favour. Buy a car which is fresh in showrooms and respected by the press and customers and it will retain its value for longer,” says Jay Nagley.

 

“Buy a diesel,” says Jason Dawe. “They’re more in demand as fuel prices rise. A car with lower running costs will depreciate more slowly because more people will want it.”

 

 

 

How to exploit depreciation

 

But the same rules can be used to take advantage of depreciation. Last of the line models may have a reduced value which compensates for a lower price.

 

Pay less in the first place, and your potential for losing more is reduced.

 

Nearly new cars can also be an intelligent buy. Franchised dealers often have the pick of nearly new cars, and they will almost always have a full service history, guarantee, warranty and low mileage.

 

Buying a nearly new car avoids much of the initial drop in value a vehicle suffers when it is driven off the forecourt by its first owner.

 

 

 

The worst depreciating cars

 

Expensive cars from popular manufacturers which aren’t known for building luxury cars often lose the most money.

 

These cars are not lacking in ability but there is a small market for them and buyers are less willing to pay an amount close to their initial sale price.

 

“Expensive cars from volume manufacturers – you can hear them depreciate when they pull up beside you,” says Jason Dawe.

 

Cars with large petrol engines and expensive maintenance bills are falling out of favour as fuel prices soar above £1 per litre and many consumers aim to go green.

 

 

 

Cars with the least depreciation

 

Jason has also owned a car which proves depreciation can be turned on its head.

 

“I owned a replica AC Cobra,” says Jason. “I sold it for £1,500 profit after owning it for three years.”

 

Jay Nagley describes an alternative but cost effective approach to beating depreciation.

 

“After buying an Alfa Romeo 164 3-litre V6 for £7,000 I drove it for seven years and then had it scrapped, so it only cost me £1,000 per year in depreciation,” says Jay.

 

 

 

The key to beating depreciation

 

The key to beating depreciation is to research the cars you can afford, and check they are the best in their class and will be in popular demand for the foreseeable future.

 

If you buy a car fitting these criteria it should still be snapped up for a great price when you come to sell it.

Edited by Stezz
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As Stu said, i dont think you will see much change in the prices due to them being a rare car, they hold their value well....

 

I have been watching them for a bit as im hoping to get one in a few months, they have already made their drop really. There is some out there for £8k but they seem to be high milage but there is some bargains out there. Im looking to spend £10k, which should see me with a decent one....

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I'd say theyre gonna hold the value they have now for a long time yet, meaning no matter when you buy your looking at 10k for a goodun, and when you come to sell it, so long as you've looked after it and not put mega miles on it you'll sell it for 10k too. Making it a more sensible buy than many other 10k cars out there
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As Stu said, i dont think you will see much change in the prices due to them being a rare car, they hold their value well....

 

I have been watching them for a bit as im hoping to get one in a few months, they have already made their drop really. There is some out there for £8k but they seem to be high milage but there is some bargains out there. Im looking to spend £10k, which should see me with a decent one....

 

Oh really Mike? what would you do with yours :cheers: !!

 

Landrovers hold their price up welll... :vangry:

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