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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.


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SADC Correspondent

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