The fact is that all cars are subject to depreciation and in general lose between 15 and 20 per cent of their retail value each year. With this in mind, it is worth noting that a car that is three years old will be worth approximately 80 per cent of the value of a two-year old car. Yet not all cars depreciate equally and it is therefore the aim of this article is to explain why cars depreciate and which car models are subject to the least amount of depreciation.

Cars 2Why do cars depreciate?

The first year tends to constitute the steepest drop in value and in fact, the value drops to its wholesale value as soon as the car is driven off the lot and the drop is typically hundreds, if not thousands of pounds. In addition, the money spent on car tax and insurance will not be factored into the resale.

After this, the wearing of components are assumed to have taken place the older the car gets – through supposed exposure to the elements – even if the car has hardly been used and this is indicated by the mileage.

Mileage is an important factor in determining resale value and if the car goes over what is expected by the industry for its age, then it will depreciate more quickly.

Which cars depreciate?

The cars that depreciate the least include: the Porsche Cayenne, Morgan Plus-4 and the Ferrari California. However, you don't necessarily need a supercar to enjoy decent resale value. Here is a look at relatively affordable cars that have great residual value.

Toyota Urban Cruiser

The diesel variant of this car typically retains 55.5 per cent of its value over three years or 30,000 miles.

Audi A6 Allroad diesel

Due to its off-road capabilities coupled with its rugged looks and German engineering, this model retains 55.6 per cent after three years or 30,000 miles.

Volkswagen Scirocco

The diesel version of this sporty looking model have the best resale value of all the Scirroco models, retaining 57.6 per cent of its resale value after three years or 30,000 miles.

Suzuki Jimny

This small off-roader has a surprisingly strong resale value, with 57.9 per cent retained after either three years or 30,000 miles.

Fiat 500C

All modern Fiat 500 models have decent resale value, but it is the open-air variant that retains the most, with 58.4 per cent retained after three years or 30,000 miles.

Skoda Yeti

If you needed proof that it isn't only supercars that enjoy impressive residual values, the Skoda Yeti proves just that, providing a whopping 65.4 of its original value after three years or 30,000 miles.

5 tips on maintaining resale value

1. Always do thorough research – look for depreciation data and look at trends in used prices

2. Buy a car either nearly-new or used to avoid the steepest depreciation levels

3. If a car has optional extras, only choose those that will add value to the car

4. Never add 'boy-racer' style modifications

5. Have your car serviced regularly

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