Fuel economy, performance and aesthetics usually top the priority list for people investing in a new car. A less obvious, but equally important factor, is how fast a new vehicle will devalue once you’ve driven it out of the showroom.
Depreciation is the difference between what a buyer pays for a brand new vehicle, and the reduced market value as each year passes.
Most cars typically lose the largest percentage of value in the first couple of years after purchase. Unfortunately, this reduction will affect the amount of money an insurance company pays out following your car being written off or stolen.
If an accident occurs involving a new car that’s two years old for example, an insurer will pay out to the reduced current market value, rather than the original cost.
Find out more about the main causes of depreciation with our handy infographic.