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  • FIRST POST
    • facade
    • By facade 7th Feb 18, 11:27 AM
    • 3,009Posts
    • 1,545Thanks
    facade
    What happened to depreciation?
    • #1
    • 7th Feb 18, 11:27 AM
    What happened to depreciation? 7th Feb 18 at 11:27 AM
    Still thinking about a "newer" car.

    AFAIK, depreciation is over 20% per year, so if I assume 20%, then a 3 year old car should be around half the undiscounted price of a brand new one, but they are nearer 75% at the dealers!

    Seems better value to go brand new, and push for nearer a 10% "incentive" off the RRP.

    What am I missing?
    I want to go back to The Olden Days, when every single thing that I can think of was better.....

    (except air quality and Medical Science )
Page 1
    • motorguy
    • By motorguy 7th Feb 18, 11:35 AM
    • 16,192 Posts
    • 9,418 Thanks
    motorguy
    • #2
    • 7th Feb 18, 11:35 AM
    • #2
    • 7th Feb 18, 11:35 AM
    Still thinking about a "newer" car.

    AFAIK, depreciation is over 20% per year, so if I assume 20%, then a 3 year old car should be around half the undiscounted price of a brand new one, but they are nearer 75% at the dealers!

    Seems better value to go brand new, and push for nearer a 10% "incentive" off the RRP.

    What am I missing?
    Originally posted by facade
    Well what we're missing is info on the car?

    Typically depreciation runs at around 50% every three years as a rough rule of thumb. Bear in mind though that this will be based on the trade in price after three years, not the retail price that a dealer might be asking for the car at three years old on his forecourt.

    Also, it will vary depending on car / demand (hence if you can tell us the make and model....)
    You are not special. You are not a beautiful and unique snowflake.
    • wgl2014
    • By wgl2014 7th Feb 18, 11:44 AM
    • 533 Posts
    • 328 Thanks
    wgl2014
    • #3
    • 7th Feb 18, 11:44 AM
    • #3
    • 7th Feb 18, 11:44 AM
    I found it helpful to use some of the online sites like Carwow or Drivethedeal to get a proper new car price rather than the rrp.
    We ended up going for a lease deal in the end but was getting quotes for around 20% off a variety of different cars.
    • facade
    • By facade 7th Feb 18, 12:35 PM
    • 3,009 Posts
    • 1,545 Thanks
    facade
    • #4
    • 7th Feb 18, 12:35 PM
    • #4
    • 7th Feb 18, 12:35 PM
    Ah, silly me!

    A 3 year old car is worth 50% of the original OTR price if you have one to sell, but you can't buy one for that, unless you know someone who is going to trade one in and pay them a bit on top.

    Looks like Drive the Deal and a new one then, best save up a bit more...
    I want to go back to The Olden Days, when every single thing that I can think of was better.....

    (except air quality and Medical Science )
    • tonyh66
    • By tonyh66 7th Feb 18, 12:49 PM
    • 1,101 Posts
    • 769 Thanks
    tonyh66
    • #5
    • 7th Feb 18, 12:49 PM
    • #5
    • 7th Feb 18, 12:49 PM
    depreciation isn't linear, your 20% per year would make a 5 yr old worth zero...
    • reeac
    • By reeac 7th Feb 18, 1:33 PM
    • 1,173 Posts
    • 472 Thanks
    reeac
    • #6
    • 7th Feb 18, 1:33 PM
    • #6
    • 7th Feb 18, 1:33 PM
    depreciation isn't linear, your 20% per year would make a 5 yr old worth zero...
    Originally posted by tonyh66
    I think that he means 20 percent per year with the calculation done each year based on the depreciated price i.e. exponential decrease.
    The half price at 3 years old seems pretty close as a general rule. I just bought a 2 year old Lexus with 6,600 miles on the clock for 60 percent of the current new price.
    • Herzlos
    • By Herzlos 7th Feb 18, 1:42 PM
    • 6,533 Posts
    • 5,858 Thanks
    Herzlos
    • #7
    • 7th Feb 18, 1:42 PM
    • #7
    • 7th Feb 18, 1:42 PM
    Yup, 20% Vs the previous year, so it'll drop in magnitude over time.
    year 1: 80% of new price
    year 2: 64%
    year 3: 51%
    year 4: 41%
    year 5: 33%

    and so on until its worth £50.
    • Comms69
    • By Comms69 7th Feb 18, 2:10 PM
    • 2,353 Posts
    • 2,207 Thanks
    Comms69
    • #8
    • 7th Feb 18, 2:10 PM
    • #8
    • 7th Feb 18, 2:10 PM
    Yup, 20% Vs the previous year, so it'll drop in magnitude over time.
    year 1: 80% of new price
    year 2: 64%
    year 3: 51%
    year 4: 41%
    year 5: 33%

    and so on until its worth £50.
    Originally posted by Herzlos
    When you fill the tank with water and take it to the scrapyard.
    • Tarambor
    • By Tarambor 7th Feb 18, 2:56 PM
    • 2,206 Posts
    • 1,592 Thanks
    Tarambor
    • #9
    • 7th Feb 18, 2:56 PM
    • #9
    • 7th Feb 18, 2:56 PM
    A 3 year old car is worth 50% of the original OTR price if you have one to sell, but you can't buy one for that, unless you know someone who is going to trade one in and pay them a bit on top.
    Originally posted by facade
    I paid £8500 for a 2 year old Mondeo worth £24k new a few years ago because they depreciate quite fast due to being popular hire and fleet cars.
    • motorguy
    • By motorguy 7th Feb 18, 3:01 PM
    • 16,192 Posts
    • 9,418 Thanks
    motorguy
    I paid £8500 for a 2 year old Mondeo worth £24k new a few years ago because they depreciate quite fast due to being popular hire and fleet cars.
    Originally posted by Tarambor
    That implies someone would / did pay £24K for it in the first place.
    You are not special. You are not a beautiful and unique snowflake.
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