28 February 2008
New car buyers should make sure they read the fine print on their car insurance policies to see how they address the issue of depreciation, uSwitch has said.
The comparison and switching service warned Britons that the top ten best-selling new cars in the country cost an average of £14,682 and lose 43% of their value in the first year.
Vauxhall's Vectra 1.9 CDTI was revealed to be the vehicle with the worst rate of depreciation, losing 58% of its value after year one and 75% after the first four years.
Meanwhile, the BMW 325d SE Coupe was found to have a more favourable depreciation rate, losing 25% of its value in the first year and 56% by the fourth year.
Ashton Berkhauer, insurance expert at uSwitch.com, said that insurers "are generally sympathetic" about the rapid loss of value that takes place in a new car's first year.
He explained that some insurers will provide a "new for old" vehicle if the car is written off in its first year, but cautioned that others will only pay "market value" - the value of the car minus depreciation - if it is written off in this period.
"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," Mr Berkhauer added.
Recently, uSwitch advised car buyers not to fall prey to insurers' "gimmicks" when shopping around.
© 2008 Adfero Ltd
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