Motorists – don’t be confused by mixed messages about car depreciation, says CAP

BRITAIN'S BEST car for low depreciation over the last three years was the Porsche Cayenne, according to new analysis by car cost experts, CAP Automotive.

Or was it?

Britain’s lowest depreciating car over the last three years was the Kia Picanto, according to the same study.


Both statements are true – so no wonder motorists are confused when looking to make the best car-buying choices to suit their budget, CAP experts say.

Depreciation – the amount of money a car loses in value after you buy it – is the single biggest factor in the cost of owning a car. It usually outweighs the costs of fuel use, servicing, taxing and even insuring the car - added together.

But industry experts too often confuse motorists by reporting depreciation in percentage terms instead of cash values, leaving the average car-buyer none the wiser about which car is really going to lose them more or less money than another.

To illustrate the problem CAP’s analysts looked at depreciation across the UK market over the three years to May 2014.  Then they reported the results in two ways – the percentage of each car’s new cost that was lost over the period and then the 20 cars that depreciated the least in absolute cash terms.

The results reveal that the Porsche Cayenne held onto more of its initial value over time than any other car, by retaining 74% of its original cost new, over three years and 60,000 miles.  But does that really make it the lowest depreciating car in Britain?

CAP’s analysis also reveals that the smallest cash depreciation over the past three years and 60,000 miles was boasted by the Kia Picanto – which lost an average of just £4,010 over the same period and mileage.

However, the Porsche Cayenne, which won hands down in percentage terms, lost an average £11,477 – costing Porsche owners almost three times as much as Kia drivers in depreciation.

CAP says the distinction between frequently reported percentage depreciation figures and real world cash depreciation is crucial for those motorists who are looking to reduce their long-term costs.

That is why the forecast depreciation figures published for consumers researching new car ownership costs at are provided in cash terms only.

Philip Nothard, CAP’s Retail & Consumer expert, said: “The car industry gets very excited about percentages because they are an easy way to talk about the relative strength of a brand in comparison with others.

“If one car retains 45% of its new cost, after three years, while another only holds 38% over the same period, it’s easy to argue that the first car is a better depreciator than the other.

“But what really matters is the cash behind the percentages because that’s what directly affects the motorist.

“Our analysis of the whole market’s performance over the last three years shows that when you look at the lowest 20 depreciating cars, in cash terms, the money their owners lost ranges between £4,010 for the Kia Picanto to £4,795 for a Nissan Pixo.

“But when you look at the lowest depreciating cars in percentage terms, the money lost ranges between £7,770 for an Audi Q3 to £13,638 for a Porsche Cayenne.

“Our tip for motorists who are switched on to depreciation as the most important element in their car costs is to ignore the percentages and stay focused on the actual money different cars will lose over time.”