When you buy a new car, you don't need a calculator to know that depreciation will set in as soon as you drive it off a dealer's forecourt. In fact, if you're buying a car on finance, then depreciation is an important factor, because the amount of money the car is worth at the end of the finance agreement determines how much you pay per month. In simple terms, depreciation is the amount of money that a car loses over its lifetime. Place new car depreciation in a graph, and the line will start at a high point and slowly fall over time. What you want is for the line to stay as high as possible for as long as possible, so that the amount of money you lose once you do come to sell is low. Unless you're buying a desirable classic or a limited-run performance car from an established manufacturer, then the car you buy will suffer from depreciation. It's just a fact of life, as a car that has been used by a previous owner isn't as attractive as a brand-new one.
However, there are cars out there that limit your losses, and we've listed the best performers below. There are companies that work out a car's depreciation using a number of factors, but they will usually work out a car's value after three years. This irons out any initial spikes in desirability as a new car comes to market, and gives a good indication of how much a car will be worth over the lifetime of a finance deal. A car's depreciation is worked out as a percentage of its new price, while car valuation firms have reams of data that allow them to set a depreciation percentage for individual models. This data is shared with manufacturers to help them determine how much buyers will pay on a monthly basis when taking out finance on a brand-new car. The main factor that determines a car's depreciation rate is its demand. If a car is in high demand, then that will help keep used values high, as buyers are willing to pay extra to get behind the wheel of a popular model.
Take a look at the SUVs and 4x4s for sale in the UK, and you'll see how depreciation works. Compare an SUV with a hatchback or a saloon from the same manufacturer on a like-for-like basis, and you'll see that the SUV usually has retained a higher percentage of its original value. That's because buyers are attracted by the rugged looks and tall driving position that an SUV or crossover offers. It's not just SUVs that are the best cars for avoiding depreciation, you can also cut your losses by choosing a desirable sports car, although the market can be a little more fickle with these machines. If you're flush with cash, then a high-end sports car or supercar can also be considered, although if you're looking to buy one of these, then depreciation is unlikely to be a deciding factor when parting with your cash. For our list of the best cars for depreciation for sale in the UK, we've given an average of the entire model range after three years and 60,000 miles. So while these scores are already good, they could be even better if you pick the slowest depreciating model in the line-up.
Once considered the ugly duckling of the Porsche range, the Panamera can now lay claim to being the slowest car in the line-up when it comes to depreciation. A score of 63.4 per cent on an average list price of around £93,254 means a loss of £34,642 after three years and 60,000 miles. What's even more impressive is that this score is for an executive model in a class that doesn't normally excel for depreciation. But clearly the Panamera's combination of rapid performance, sharp handling, practicality and the attractive low running costs of the plug-in hybrid models clearly puts it a step ahead of its rivals. One area of the new car market that consistently performs well is the camper van sector, and the VW California is the best performer of all. The California is based on the VW T6 Transporter van, so it comes with modern engines and a car-like driving experience, which further adds to its appeal.
