Car Insurance News
Car owners 'losing £500' every month
Car Insurance News - Published: 22/08/2007
People buying the UK's top ten best-selling cars lose around £500 per month over the first year of ownership - as the value of their new set of wheel depreciates at break-neck speed, a new study claims.
A report from uSwitch.com reveals that consumers purchasing one of the UK's ten best-selling models lose around £16.37 every day due to depreciation in the first year.
The study says that a 'normal' car in the UK costs around £15,400 on average, and loses 42 per cent of its value in year one. The Ford Focus, Europe's best-selling car has the highest level of depreciation in its first year, at 48 per cent.
In contrast, the car that comes third in the list, the BMW 325d SE Coupe, depreciates by a comparatively paltry 25 per cent over the first year of its lifetime.
"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, commented.
"For most, a one year old car represents far better value as this is the period when the bulk of depreciation takes place. 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 this, it was the UK's top selling car in 2006."
"Despite the rapid depreciation of new cars, insurers are generally sympathetic certainly in the first year of ownership," Mr Thompson added.
A report from uSwitch.com reveals that consumers purchasing one of the UK's ten best-selling models lose around £16.37 every day due to depreciation in the first year.
The study says that a 'normal' car in the UK costs around £15,400 on average, and loses 42 per cent of its value in year one. The Ford Focus, Europe's best-selling car has the highest level of depreciation in its first year, at 48 per cent.
In contrast, the car that comes third in the list, the BMW 325d SE Coupe, depreciates by a comparatively paltry 25 per cent over the first year of its lifetime.
"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, commented.
"For most, a one year old car represents far better value as this is the period when the bulk of depreciation takes place. 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 this, it was the UK's top selling car in 2006."
"Despite the rapid depreciation of new cars, insurers are generally sympathetic certainly in the first year of ownership," Mr Thompson added.
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