The rate of depreciation typically slows with age. On average, a car depreciates by 15-25% in the first year and up to 60% over three years, assuming it travels 10,000 miles annually. A new car depreciates faster than a used model, losing 10% of its value as soon as it is driven off the lot. For example, if you purchase a new car for £33,556, it will lose £3,356 in value as soon as you drive it and around a further £17,780 over the next three years.
This loss in value varies between models – while an Audi may depreciate by 40% on average over three years, a Porsche may lose just 25% over the same period. The manufacturer, model, size, condition and year of the car are all factors that affect the depreciation rate of a car. For example, if the manufacturer has a reputation for reliable, strong and durable vehicles, this can help withstand depreciation.