Depreciation - save now, pay later - Day-to-day bills

Article 3 of 5 See all
  •  Buying a cheaper car could cost you
  •  Depreciation costs exposed
  •  Are you a winner or loser?

Buying and selling aren’t the only considerations. Things can start to even themselves out the moment you drive off the forecourt.

Using the same two cars, the Peugeot drinks an extra £250 worth of diesel every 12,000 miles, and a year’s road tax for it costs £95 more than it does for the Audi. The Peugeot is cheaper to insure, but that saving is wiped out by its higher servicing costs.

Put simply, each year the Audi will claw back £340 of its higher purchase price by costing you less to run than the Peugeot. So, even if you completely ignore depreciation, the A3 will earn back its extra cost in less than eight years, and save you money after that.

This isn’t a one-off example, either. Totting up the total cost of car ownership often unearths some surprising results. It proves that a VW Polo could end up { costing you less than a Vauxhall Corsa, that an Audi Q5 could actually be the ‘budget’ alternative to a Nissan X-Trail and that the new Saab 9-5 is likely to work out dearer in the long term than the Jaguar XF.

Optional extras
Our Three-Year Costs are based on standard-specification cars. Adding optional extras will bump up the price, but choose the right ones and you could be quids-in when you sell.

Sat-nav may not help used value
For example, you’d be foolish to buy a BMW X5 without satellite-navigation – 90% of X5 buyers choose this option when buying BMW’s big 4x4, so there isn’t likely to be much interest in a second-hand car without one.

The opposite is true if you’re buying a Ford Fiesta. By all means add extras such as leather seats and a sat-nav system, but be aware that you’re unlikely to recoup much of the cost when you sell.

On cheaper cars, it’s always sensible to tick the air-con and alloy wheels boxes. Bluetooth and stability control are other worthwhile options, whatever the car. These will be standard on virtually every new car by the time you sell, so you’ll have more interested buyers.

Depreciation - save now, pay later - Three-Year Cost

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