How to avoid losing a fortune on a used car

IF you want to minimise the amount of money you lose on a used car, buy a coupe or a convertible.
That’s the finding of a survey by the publisher of the car industry’s bible, Glass’s Guide to Used Car Values.
It revealed the types of used car that are least susceptible to depreciation by assessing more than 6,000 different three-year-old models. The research indicated that used cars are more likely to retain a greater proportion of their value if they are a coupe or convertible, small or lower-medium sized, are produced by a prestige-brand manufacturer, and powered by a diesel or low-capacity petrol engine.
Various factors contribute to strong residual values – the more of these characteristics a car has, the greater the chance that its depreciation will be minimised:

Coupe or convertible
Coupes and convertibles claim six places in the top 10 list of slowest-depreciators, and the residual values of these cars will typically far outperform those of more practical saloons and hatchbacks.

Small or lower-medium sized models
Smaller cars lose the least amount of money over the typical three-year ownership period.  The Perodua Kelisa may not be regarded by many as an aspirational
second-hand purchase, but in cash terms (rather than as a percentage of retained value) it depreciates more slowly than most cars – losing just £2,800 over three years.
By stark contrast, the Bentley Continental T coupe sheds £141,000 over the same period.

Premium brand
While a prestige badge is no guarantee of success (as illustrated by the heavy depreciation of some large luxury saloons), the best performing cars are typically those produced by the likes of Audi, BMW, Mercedes, Porsche, etc.  Audi has a particularly strong showing in the top 10 list, reflecting a wider improvement in its overall market standing in the UK.
So-called ‘sub-premium’ models also fare well: two Volkswagens are included in the top 10 list of slowest-depreciating cars.

Is diesel critical?
Selecting a diesel variant will improve the residual value of many cars.  However, the top 10 list of
slow depreciators features five petrol-engined cars, partly because of the strong residual values of sporty, high performance petrol models, and also because diesel engines are rarely found on those smaller cars that boast strong residuals.

New to the used market
Depreciation will be lower when a used car is available in limited numbers.  The residual value of any car is likely to be higher if the vehicle was originally purchased new within 12 months of the model’s launch.

Manufacturer support
Used car buyers normally avoid anything that is obsolete.  Two of the cars in the list of 10 fastest-depreciators are Rover models, the 45 and 75 petrol saloons, which lack the support of a franchised network following the closure of the car manufacturer in 2005.

Not ‘distress sold’
Those cars that hold their value best will not have been ‘distress sold’ when new.  In other words, they will not have been offered with significant discounts or other financial incentives, nor will they have been the subject of pre-registration

All but one of the cars in the list of the 10 slowest-depreciators are marketed as high performance or ‘sporty’ models.

Residual Value ‘Top 10’
The following table shows the top 10 list of used cars that retain the greatest proportion of their original list price, expressed as a trade value

Ranking / Manufacturer / Range and model(s) / Percentage residual value
(2004 ‘04’- plate, 39,000 miles)

1 MINI Mini 1.4 diesel / 1.6 petrol – Hatchback and Convertible – 71%
2 Mercedes SLK200 Kompressor Convertible – 69.5%
3 Volkswagen Golf 3.2 R32 three and five-door – 65.5%
4 Nissan     350Z 3.5 Coupe – 64%
5  Porsche Carrera 2/4 (997) Coupe and Cabriolet  – 63.5%
6  Audi 2.0TDI Sportback Sport – 63%
7 Seat Leon 1.9TDI Cupra and FR – 63%
8  Aston Martin DB9 Coupe – 62.5%
9 Audi A6 2.0TDI SE – 62.5%
10 Volkswagen Beetle 1.9TDi Cabriolet – 62.5%

Residual Value ‘Bottom 10’
The following shows the bottom 10 list of used cars that retain the lowest proportion of their original list price, expressed as a trade value

Ranking / Manufacturer / Range and model(s) / Percentage residual value
(2004 ‘04’- plate, 39,000 miles)

1 Citroën    C5 3.0 V6 Exclusive five-door- 17.5%
2 Proton     Wira 1.3 / 1.5 four-door – 18.5%
3 Hyundai Elantra 1.6 / 2.0 CDX five-door – 19%
4 Vauxhall Omega 2.2 GLS / CDX four-door – 20%
5 Kia Shuma 1.8 SE / LX five-door – 21%
6 Rover 45 1.6 Classic / 1.8 Impression four-door – 21.5%
7 Vauxhall Frontera 3.2 Limited – 21.5%
8 Rover 75 1.8T Connoisseur / Connoisseur SE four-door – 21.5%
9 Alfa Romeo 166 2.5 Turismo / Lusso and 3.0 Turismo – 22%
10 Isuzu    Trooper 3.5 Insignia – 22%