Newspaper article Evening Gazette (Middlesbrough, England)

Good Residuals - but Who Are They Good For?

Newspaper article Evening Gazette (Middlesbrough, England)

Good Residuals - but Who Are They Good For?

Article excerpt

Byline: MATTHEW TUMBRIDGE

I OFTEN have car buyers ask me which cars lose least to depreciation because they don't want to lose a lot of money. I can understand them not wanting to lose money, but you need to ask them a few questions to see whether heavy depreciation is actually bad news.

New car buyers, of course, need good residual values. If you are buying a new car and planning to sell in less than three years, then you want cars with low depreciation. But it's at model level that you need to look, not brand level. For example a BMW-made Mini is still popular so holds its price well. But that can't be said for the entire BMW range. However, that only deals with a tiny part of the market. Most of us buy cars older than two years of age, so actually what we all need is lots of car for little money.

And because depreciation, in cash terms, can only last for a finite period, the more it loses early on, the more car we get for our money and the less we'll lose when we buy a three-year-old motor. …

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