CAR BUYERS can look forward to significant reductions in the value of second-hand cars this summer.
According to GE Money Ireland, which tracks the value of used cars in Ireland year-on-year, figures for May show that used car values as a percentage of new prices have shrunk across almost all segments, with the biggest fall seen at the luxury end of the market, where depreciation is at its highest.
The latest figures show that motorists can count themselves lucky if their new car is worth more than 55 per cent of what they paid for it after three years.
The average small- or medium-sized family car, such as the Ford Focus or Volkswagen Golf, is typically worth 55 per cent of its new price.
Superminis, such as the Ford Fiesta or Toyota Yaris, retain about 53 per cent. Family cars, such as the Toyota Avensis and Ford Mondeo, and compact executive cars, such as the BMW 3-Series, retain close to 52 per cent of their original value over three years.
However, it is cars at opposing ends of the markets that suffer the most through depreciation, retaining below 50 per cent of their value.
A small city car that costs €13,000 will be worth just €6,200 after three years, and should the owner keep the car for a further two years, it will be worth just €4,100, or 32 per cent of its original value.
Luxury cars are hit even harder. A €108,000 luxury car will retain just 44 per cent of its new value after three years, coming in at €48,000.
If you keep it for five years, this figure drops to just 28 per cent, or €30,000.
These figures are down 4 per cent on estimates for 2007, meaning luxury cars are depreciating faster, but will make better used buys.