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Expert Warns Motorists on Car Depreciation: Steer Clear of New Models for Best Value
A prominent motoring expert is advising drivers considering a new vehicle purchase to prioritize pre-owned options, highlighting significant car depreciation impacting certain makes and models. While all new automobiles experience an immediate decrease in value upon leaving the dealership, specific used cars depreciate at an accelerated pace. To assist consumers in mitigating financial losses due to rapid depreciation, Australian automotive authority Adam Morris, known for his YouTube channel ReDriven, released a video recommending drivers opt for used cars within particular brands, notably Peugeot.
Peugeot’s Depreciation Concerns Highlighted
Morris stated, “Striking aesthetics, feature-rich interiors, and exceptional driving dynamics characterize these vehicles. However, acquiring a new model could be a detrimental financial decision.” He elaborated, “As a brand, Peugeot vehicles, on average, retain only 53.3% of their original value [after two to seven years]. The primary contributors to this downturn are their SUVs. The 2008 ranks as the third-worst performer, losing 37.5%, followed by the 5008 at a 49.4% loss, and the 3008 depreciating by 51.7%. This trend is reflected across other automotive manufacturers.”
He further commented, “Should Peugeot concentrate on producing appealing and enjoyable compact cars, similar to the 208 GTI, coupled with a robust dealer network and competitive pricing, they might become a considerably more secure purchase.”
Despite acknowledging Peugeot’s diverse and visually appealing model range, the YouTuber cautioned that new Peugeots do not maintain their value as effectively as competing brands.
Study Reinforces SUV Depreciation Trend
Findings from a 2024 UK market analysis by Scrap Car Analysis corroborate Morris’ observations, indicating that SUVs generally experience the most substantial depreciation. The 2008 compact crossover, for instance, reportedly loses 66.2% of its value within a four-year period.
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Consequently, prospective Peugeot buyers are strongly encouraged to select a pre-owned vehicle or consider new models with better resale value from the brand’s lineup, such as the 208 supermini or 308 family hatchback.
Tesla’s Value Retention Under Scrutiny
Later in his analysis, Morris extended his warning to include new Tesla purchases, noting some wholesalers are now hesitant to accept them in trade.
He explained, “The situation with Tesla was anticipated. However, considering Tesla’s current market performance, the depreciation trend could worsen. On average, Tesla, as a brand, retains approximately 55.8% of its value. Specifically, the Model Y experiences a 35.9% decrease, and the Model 3 declines by 46.5%.”
Morris added a forward-looking perspective: “While future market conditions are unpredictable, there are indications that value depreciation could intensify for Tesla. We have information suggesting some wholesalers are presently declining to trade in Tesla vehicles.”
Market Dynamics Impacting Electric Vehicle Depreciation
While external factors, such as political affiliations, may indirectly influence new Tesla sales globally, the influx of pre-owned Teslas into the market is also impacting used car values.
Data from Motorway reveals the flagship Model X crossover endures the most severe depreciation within the Tesla range, losing 43% of its value over three years.
It’s noteworthy that numerous electric vehicles are facing comparable depreciation challenges due to a high volume of previously leased or fleet models entering the used car market, coupled with the introduction of new electric vehicles at increasingly competitive price points.