23 August 2007
Drivers who have recently bought a brand new car are being warned that the value of their new set of wheels could depreciate by around £6,000 in the first year alone.
According to research by uSwitch.com, consumers buying the UK's top ten best-selling cars spent a massive £11.5 billion in 2006.
However, an average new car costing £15,430 to buy could lose up to 42% of its value during the first year on the road, working out as a loss of £17 per day.
What is more, the nation's top-selling car, the Ford Focus, is hit by the highest level of depreciation in its first year at 48%.
In comparison the UK's third best-selling vehicle, the BMW 325d SE Coupe depreciates by just a quarter of its original value, the study found.
Indeed, depreciation accelerates rapidly after a car's first birthday, climbing to 52% by the second year, 60% by its third year on the road and 67% by the fourth year.
"Buying a brand new car is an exciting moment, but in reality it is not as simple as just driving off the forecourt and into the sunset," Aron Thompson, Head of Insurance at price comparison and switching service, uSwitch.com, advised.
"The amount of money lost on a car in the first year does vary from one brand to another but the Ford Focus clearly takes the number one spot with almost half of the car's value disappearing after just 12 months.
"Despite the rapid depreciation of new cars, insurers are generally sympathetic certainly in the first year of ownership. For example, the AA, More Th> n and Swiftcover will all provide a 'new for old' vehicle in the event that the car is written off.
Mr Thompson concluded: "Buying a brand new car is a big expense so it's really important that people do their homework and find a car that will give them value for money. In addition to this, motorists need to think about the cost of insuring the car before they hand over the money."
Lucky drivers "with the cash to flash" should invest in a 'supercar' for a better long term investment, the online price comparison and switching service revealed.
© 2008 Adfero Ltd
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