What Car? Q&A - Why do cars depreciate?

Q: Why do some cars depreciate more than others? I understand that if I buy an Audi or BMW it will be worth more than an Alfa or Citroen when I come to sell - but why is this?
Adam Bolter

A: It's all down to how many people want to buy the car when you've finished with it. The more people that want it, the more it will sell for.

There are a number of factors that affect the demand for used cars. The main ones are image and reliability, but specification and the amount of discount that dealers are offering on similar new cars also play a part (if a car is heavily discounted when new, it affects the used value).

German cars have long had a reputation for solidity, and this has gone a large way to making them more desirable. Italian and French cars, however, aren't renowned for taking the miles well. As a result, they generally lose their value faster.

This is backed up, to a certain extent, by the annual JD Power and our own reliability surveys. For example, Alfa finished third from bottom in this year's reliability survey.

Citroen, however, finished above both Audi and BMW this year. A few more results like that and the French manufacturer could find its cars holding their value better.

Although an Audi or BMW will almost certainly be worth more than an equivalent Alfa or Citroen when you come to sell it, they will probably cost you more to buy in the first place. You won't be able to haggle as much off the price, either.

You'll have to work out which will be the cheaper option in the long run. The simplest way to do this is by comparing the What Car? Real Cost of the models you're interested in.

Real Cost takes into account all the costs associated with buying a car, running it for three years, and then selling it with 36,000 miles on the clock.

It includes the likely discount you'll be able to haggle when buying, and the predicted amount you'll get back when selling.