DEPRECIATION costs more each month than most household bills – but half of Britain's hard-pressed motorists admit to having no idea how much.
A new report from independent car information experts, CAP Automotive, reveals that although the typical medium size family car cost more than £300 per month in depreciation alone over the past 3 years, 48% of owners had no clue – until they sold it for less than they bargained for.
For larger family cars the figure was well over £400 per month or a staggering average £15,163 lost over 3 years and 36,000 miles.
But, according to interviews with 500 motorists quizzed by CAP about their motoring cost concerns, almost none had a realistic idea of their car’s rate of depreciation – and the majority confessed that they didn’t have a clue.
Depreciation is a fact of life for car owners, but CAP has now revealed for the first time to motorists exactly how much it varies – so they can make smarter choices to suit their long-term personal budgets.
And by breaking down all of the costs of car ownership – including forecast depreciation – into simple, understandable figures, CAP has given motorists an unprecedented window onto their future spending on new and used cars at www.cap.co.uk/consumer/total-cost-of-motoring
The free ‘Total Cost of Motoring’ tool reveals stark differences between different cars and their potential impact on the family budget.
For example, the difference over 3 years between the total cost of owning the cheapest and the most expensive ‘supermini’ (Fiesta/Corsa size cars) registered in October 2013 is predicted by CAP to be a whopping £8,783 – or £243 per month.
In the ‘lower medium’ sector (Focus/Astra size cars) the difference, over 3 years and 36,000 miles will be £12,858 – or £357 per month.
Although some of these differences are accounted for by variations in fuel consumption, road tax and servicing costs, CAP’s figures show once and for all that it is depreciation which takes the lion’s share of the motorist’s cash.
And despite the national obsession with fuel economy and pump prices, CAP’s figures reveal that fuel consumption is not even close to being a reliable indicator of long-term ownership costs.
For example, the driver of the most frugal diesel hybrid large family car in CAP's Total Cost of Motoring database will spend £2,737 at the pumps over 36,000 miles. In contrast, the owner of a conventional petrol Skoda Octavia will stump up £3,750 - more than a thousand pounds more - over the same distance. But the Skoda driver will be better off to the tune of £248 per month overall, over 3 years, due to their car depreciating at half the rate of its more fuel-efficient rival.
Even among closely related cars in the same model ranges, the differences in ownership costs do not simply reflect relative fuel economy. Taking the same Skoda example, the petrol model beats its own more fuel-efficient diesel Octavia sister car in the total cost of ownership stakes by £421 over 3 years – despite costing £689 more to fill up over the period.
It is the same story for service and maintenance bills and road tax. Despite the focus many consumers place on these factors when they are choosing a car, CAP's Total Cost of Motoring tool reveals that they are only the tip of the running cost iceberg.
Philip Nothard, Retail & Consumer pricing expert at CAP Automotive, said: “It has become an article of faith that consumers are well-informed about cars, thanks to the internet and the ease with which they can research deals and play dealers off against each other on price. But our research shows that depreciation is the one area where people are still in the dark – even though it is the cost that hurts them most.
“Our total cost of motoring figures show definitively that a better understanding of depreciation will help Britain’s motorists save serious money.
“With wages failing to keep pace with inflation and a growing cost of living crisis, it is vital that consumers have more and better information at their fingertips so that they can make properly informed choices about how best to save money.
“The unique, free to use, CAP Total Cost of Motoring tool gives everyone in the market for their next new or used car a chance to make the best choice to suit their long-range budget. We have previously reported that 1 in 3 motorists admit to subsequently regretting a car purchase on the grounds of the overall costs they suffered. Now they have the chance to avoid those regrets.
"Our research among motorists also reveals that 1 in 2 of them intend to buy a cheaper car to run next time.
“For the first time, CAP Total Cost of Motoring gives them the insight into real car ownership costs needed to achieve just that.”
Notes to Editors
NOTES TO EDITORS: The CAP Total Cost of Motoring tool at www.cap.co.uk/consumer/total-cost-of-motoring is produced by CAP independently of commercial influence from any 3rd party. It is based on data for which CAP has been regarded as an independent automotive industry benchmark since 1979.