Vehicle depreciation: not all equal

For some, choosing which car to buy has become a real obstacle course. Not only is the supply considerable, but motorists need to be thinking about reselling the vehicle they have yet to buy. While some brands do seem to retain their value over time, others are very difficult to resell at the right price. Time to look at OEMs and their (varying) depreciation.

Depreciation: an exponential and inevitable fall in value

Although all cars depreciate (i.e., lose value over time), most motorists, with very few exceptions, want to get a good deal on resale. For this reason, they often find themselves having to buy a vehicle according to its propensity to retain (or lose) its value over time. The first magazine, in France, that took an in-depth look at the Depreciation factor was Caradisiac, doing so by analysing the database of La Centrale, a used car classified ads site. Drawing on several million advertisements published each year, a Caradisiac study compared the price of a new vehicle with the price offered by dealers for many models.

First lesson: in almost all cases, a vehicle loses value at an exponential rate. In other words, a new car will initially lose a lot of value, before seeing its loss of value subside and decline less quickly from the age of 10. This survey also tells us that a general-purpose vehicle loses 25% of its value during the first year, compared to only 18% for a premium car. However, these results are only averages, and depreciation can vary enormously from one year to the next, but also from one model to the next.

Diesel, knocked out by petrol on resale

Not only is the number of diesel vehicles sold continuing to fall, the study also reveals that diesel cars depreciate faster than petrol cars. This unexpected finding shatters the conventional wisdom that diesel diesel cars depreciate slower. The study found that diesel depreciates much more than petrol, whether after just 1 year or 10 years. For example, a 5-year-old diesel will have lost 54% of its value, compared to 42% for a petrol on average. After 10 years, the depreciation on diesel is 73% compared to 61% for an unleaded vehicle.

However, this result should be put into perspective: many motorists are currently looking to resell their diesel car in order to switch to petrol, particularly in anticipation of future environmental regulations. As a result, the diesel market is saturated (with supply exceeding demand) and this pushes owners to reduce their asking price. This trend, if it were to continue, would make the resale of diesel vehicles increasingly complicated.

French brands: the leaders in depreciation

The big surprise actually comes from Dacia. The low-cost manufacturer ranks second in the rankings with only a 7% depreciation after one year. An unexpected result that confirms Dacia’s attractiveness.
The line-up totally changes  after 10 years. This time, it is truly the luxury brands that take the top spots, with, in order, Lamborghini (- 40%), Ferrari (-43%) and Porsche (- 48%). Among the more generalist brands, some are doing relatively well, such as Jeep (-56%), Suzuki (-60%) and the must-have Dacia (-63%). Behind them, it’s a free-fall for French and German OEMs alike. If Mercedes loses on average 72% of its value after 10 years, it is even worse for French models: Peugeot, Renault and Citroen depreciated between 73% and 76%.

Vehicle depreciation: not all models are created equal.

This study also looked at the loss in value of the best selling used vehicles. An opportunity to take stock, category by category, of the most popular cars.
– Superminis: Even though the Renault Clio 4 has been the best-selling model in France for several years, it also has the highest depreciation after one year (-20%), whereas a third-generation Citroen C3 loses only 8% of its value during the same period. At 10 years, the depreciation levels off and equalizes, since the 208, the Clio and the Polo all have a discount of around 50%.
– Compact: the Volkswagen Golf 7 is the compact that least depreciates after one year (-15%). However, from 10 years onwards, most compacts will be lost about 70% of their value. This applies to the Golf as well as to the C4 or 308.
– SUV: the Dacia Duster is the champion in the category with a loss in value below 10% after one year. Next comes the Peugeot 3008, which is doing well, unlike the Renault Kadjar and Nissan Qashqai. After 10 years, the gap widens with the Duster still under the 50% mark, while its main rivals are close to 70% depreciation.

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