A survey reveals changing habits on the used market. Michael McAleer, Motoring Editor, reports
Used car prices fell on average between 3 and 5 per cent in the second quarter of this year, according to the latest quarterly used car price survey from GE Capital Woodchester.
The survey reveals that prices fell by about €400 on cars priced at €10,000 or between €1,000 and €1,500 on cars between €25,000 and €30,000.
The survey shows that good deals are available in family saloons, particularly those registered in 1998 or 1999. Between €5,000 and €8,000 should buy you a car in this category with a high level of additional features, a full service history and up to two years NCT.
Generally, pre-2000 cars offer very good value, because of a certain snobbery about having 1990s plates. Many of these cars are still in very good condition and, says the survey, "with minimum maintenance should be good for another five years".
According to the Woodchester survey which was carried out in association with Motor Trade Publishers, "the advice for new car buyers concerned about long-term residuals is to consider moving up to the compact executive segment - BMW 3 Series, Lexus IS200, Mercedes C-Class - as the additional long-term cost is nowhere near as significant as the new prices would suggest."
Refinement of diesel models in recent years, thanks in part to common-rail technology, has made them increasingly popular among used car buyers. For years diesels had carried a premium over petrol versions when originally sold, but the premium didn't carry forward to the three- or five- year resale value. Now it seems the premium is being taken into account in the used market.
Further good news comes as some firms, such as BMW, price diesel and petrol models equally. Others are significantly reducing the diesel premium, as the development costs no longer warrant difference over petrol versions. It's likely that these new better-priced diesels will depreciate less than their petrol equivalent, thereby offering better value for the new car buyer.
In each market segment, there are several noticeable trends. At supermini level - Peugeot 206, Toyota Yaris, Ford Fiesta - the strongest demand remains for five-door versions. Many five-year-old cars in the segment are still in current model ranges. However, younger customers still seek out three-door models - the introduction of significantly different body styling between three- and five-door versions is an attempt to increase the distance between two versions of the same model. In time, this could improve residuals on the three-door models.
The small-to-medium family segment has seen some high profile new launches this year, in particular the VW Golf and Opel Astra. As a result of people trading up, many older versions of these models are on the market and in good condition. However, the Golf has a history of retaining value, so don't expect significant discount just because of the model update.
The most significant fall in resale values has been at the upper end of the market. Luxury cars - those retailing for an average of about €95,000 when new - are down to just 29 per cent of their value after five years, coming in at about €27,500.
However, there are several variations in depreciation in this segment. Some Mercedes S-Class models, especially those with smaller engines or diesel models, retain up to 40 per cent of their value even after five years. Yet some older BMW 7-series models retain about 24 per cent.
There's better news for BMW in the compact executive market, where its 3-series models perform well, in particular Coupé versions, which are in continuing demand.
The market is seeing a growing number of pre-registered cars - those already registered as 04 models but with little or no mileage. The result is a new price category, sometimes referred to as "newsed", which is often priced between new and used models.
Summer is also a time for thinking convertible. It's a very specialist market with second-hand buyers particularly attentive to exterior appearance.
Colour is really important to many, as are electric roofs, alloys, leather seats and a quality stereo. Ironically the engine seems to be the least of their concerns here, so expect to pay more for a well-maintained car with the right colour and a good stereo than a more powerful version.