The biggest cost of running a new car is usually depreciation. Although we feel the cost of fuel, insurance and road tax more regularly its what our beloved car is worth when we part exchange it that can hit us hardest.
With new car sales in the doldrums at the moment the car companies have been discounting like crazy to keep the sales going and in turn this has depressed second hand values. Anybody part exchanging a three year old car now is unlikely to be in for a very pleasant experience!
But data released by Euro Tax Glass’s (the trade experts on car values) has revealed that some areas of the market have been more badly affected than others. The figures reveal that whilst demand for used hatchbacks like Vauxhall Astra, Ford Focus and VW Golf remains fairly strong there bigger brothers (Vectra, Mondeo etc) are taking a real kicking.
Despite costing more when new, the larger models have fallen out of favour with used car buyers and are actually changing hands for less money than the smaller cars. For example a 2005 ‘05’ plate Ford Focus 2.0 litre Zetec with 8,000 miles on the clock is worth about £11,900 whilst Ford Mondeo 2.0 litre Zetec of the same age and mileage is worth just £10,550.
As with everything there are two ways to read the figures. One could argue that the Focus is over priced, being a recent new model it still commands a bit of a premium, and of course if your in the market for a used car then the Mondeo does represent fantastic value.
But to me the signs are clear, cars are getting bigger, super mini’s like the Yaris and Clio will now accommodate 5 people and the likes of the Ford Focus and Peugeot 307 are now big enough to do most things that the larger cars used to. People can now get a pint into a quart pot now and therefore the appeal of ‘larger’ models is on the wane. If I were buying a new car I’d settle for a Focus, Golf, 307-size car as they have the technology, safety and refinement of bigger more expensive cars. But if I was buying a used car now I’d ‘go large’ you get more for your money and if you pick your model, ideally a diesel, then your long term running costs (after that initial slug of depreciation has been taken care of) should be virtually identical.