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How much value does a car lose in a single year? Data study shows that new cars are bad investments

How much value does a car lose in a single year? Data study shows that new cars are bad investments

The South African web service that tracks second-hand vehicle prices, True Price, has made a startling discovery when they analysed the resale values from auction data and resellers. Even among the top ten best-performers in terms of resale value, most models shed as much as 25% of their value in the first year after purchase.

According to Darryl Jacobson, managing director of True Price, they conducted the first-ever study in the resale value stakes. “We decided to analyse which 2018 model year vehicles achieved the best resale value (measured against original list price) during 2019. This has never been done before in South Africa.”

The True Price team attends bank repossession auctions throughout the year to document the prices that are achieved. The company has data for thousands of vehicle auctions on its system. Accordingly, it is able to provide highly scientific and extremely accurate vehicle valuations.

The car that came out tops as the best resale-value vehicle over a one-year period is the Volkswagen Tiguan but even this popular mom’s taxi lost 13% in value from new in 2018 to second-hand in 2019. According to the True Price data, the Tiguan retained 87.07% of its new value.

Second is the Kia Picanto which managed to keep 81.27% of its value with the Volkswagen Polo Vivo third with 80.42%.

The Volkswagen Golf, always a popular item on auctions, kept 80.06% of its value, only a whisker above the threshold for shedding 20% value in a single year. Further down the list, all cars shed at least 20% of their value in just one year.

In fifth position is the Kia Rio (80%) followed by the Toyota Hilux (78.56%), the Toyota Fortuner (77.73%), the Isuzu KB/D-Max (76.41%), the Renault Kwid (73.3%), and finally the Hyundai Grand (73.26%).

By implication, all other vehicles sold new in 2018, lost at least 27% of their value in a single year. No luxury car made it to the top ten list.

“This first-ever study into annual winners in the resale value stakes – which analyses 2018 models sold in 2019 – will be repeated at the end of 2020. “We will analyse all the 2019 models sold in 2020 and provide another top ten list at the beginning of 2021. concluded Jacobson.


 

About The Author

SADC Correspondent

SADC correspondents are independent contributors whose work covers regional issues of southern Africa outside the immediate Namibian ambit. Ed.

Following reverse listing, public can now acquire shareholding in Paratus Namibia

Promotion

20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.