Car Buyer's Guide

Car Finances' unique guide to car buying offers you advice, starting with the single most important factor - depreciation.   To go straight to great UK Finance deals click here or here.

Mini

 
Mini Car Finance

The Mini is our absolute top tip for avoiding the perils of depreciation - sellers of one year old, average mileage cars are currently getting trade in prices that are almost the figure they paid for their car originally.  That's 12 months of very low cast driving.

The reasons for this are simple - the Mini's a very popular car, with a long waiting list.  There are plenty of buyers who are prepared to pay almost list price to get one without waiting 12 months.

Mini is also a small, high prestige car - so likely buyers are probably going to be private consumers who don't mind paying the right price for the car that they want.  BMW dealers, who have many of the used Minis for sale are also adept at keeping used prices high - the company know that for all their range, stable used prices increase the number of people prepared to invest in their cars - so it's a virtuous circle.  The dealers are happy because they're shifting new cars easily, and the buyers are happy because they're not loosing a fortune when trade in time comes.

Also in its favour, the Mini's a relatively cheap prestige car - normally you have to go well into the £20K range, or far beyond it, to get a car with low depreciation.  And that increases the loan you need to finance, so that your finance charges outweigh the benefits you get from low depreciation.

Other Models

For example, look at the prices in the dealers for used, low mileage Porsche Boxsters - some are actually higher than the list price of new vehicles, but don't think that that means you can sell your new car back to your Porsche dealer at a premium - it doesn't work like that.  They'll be looking for several thousand pounds margin between the price they pay to you, and the sticker price for the forecourt.  If you don't sell through a Porsche dealer, then you can expect to be competing against imports which will be selling for a few thousand pounds less than the normal market value.

Model Changes

When buying, always investigate whether the market might change in the near future.

Some changes can be on a global scale - for example a large hike in oil prices might hit the resale value of large premium cars, or performance motors, but might actually be good for anyone selling a low mileage Clio or Punto.

When manufacturers were forced to lower UK prices by as much as 15% to bring them closer to those on mainland Europe, the same reduction in price was automatically applied to the prices of second hand vehicles.  If you had just paid £20K for a vehicle that was now selling new for £17K, then you were not likely to be able to sell it for anything like the price that you paid out.

Other changes will relate to the release of new models by a manufacturer - these almost always mean bad news for the owners of recent cars.  A recent tiny upgrade on VW Passats to include chrome trim was said to have hit the price of even new Passats that didn't have the feature by as much as 10%.  So when the manufacturer releases a completely new model of a car, you can expect even greater reductions in resale value.  There are a few exceptions to this rule, particularly for popular cars when the new model isn't well received by the press, but on the whole it tends to be bad news.

Also be very wary of 'rep' cars.  These also tend to suffer because the fleets buy them in huge numbers at very low prices - often as much as 30% or even 40% off list price.  They can then run them for three years and dump them at very low prices.  If you're trying to sell the same model of car then for you the depreciation percentage is going to be massive.