RSS feedsAll cars will lose money over their lifetime, but the amount they will lose can vary dramatically. After a typical fleet lifecycle of three years/60,000 miles, used fleet cars can be worth anything from 60% to as little as 19% of their original value.
As a general rule, matching low production volume with high demand is a recipe for residual value success. High volume and low demand is a recipe for disaster.
Some marques of car appear a safe bet when it comes to retaining their value. As a case in point, the Honda Jazz and the Mini currently retain their value very well, with relatively limited supplies and a high demand. Similarly, the ever-popular Volkswagen Golf, BMW 3-series and Audi A4 have a reputation for great residuals across the range.
By contrast, big executive saloons tend to shed a large amount of money, because buyers don’t want to take the risk of the high running costs associated with big cars. Other poor performers include the traditional ‘rep-mobiles’ such as the Ford Mondeo and Vauxhall Vectra, where volume sales and front-end discounts tend to drive down prices.
There are services available, such as residual value experts EurotaxGlass and CAP Motor Research, which can help you work out how much a car will be worth in three years’ time. Where once valuing a fleet would have meant a laborious series of calculations, now services constantly monitor the value of the fleet. These can reveal the value of a fleet at today’s and future disposal prices, along with individual model, derivative and sector trends.
But it isn’t just choosing the right car that is important: putting the right equipment in can also pay dividends at disposal time. On a prestige brand, the total options bill for choosing sat nav, leather upholstery and electric sunroof can be as high as £4,620 new. But in the used market those features retain about £850, adding £3,770 to the cost of ownership over a typical fleet cycle.
Colour also plays a significant role in used car values. On the BMW 3 -series, eight of the 12 available colours reduce the car’s value after three years and 60,000 miles.
Bearing all these issues in mind, which are the cars that hold the most value? According to Glass’s Guide, the Mini retains a better residual value over a three-year period than any other car on sale in Britain. It says that the Mini One is predicted to retain 66% of its £10,000 new price over three years and 36,000 miles.
Other star performers are the Honda Jazz 1.4 dsi (62% of its £10,557 new price) and the Porsche Boxster 2.7 (62% of its £32,640 price).
CAP puts the Mini in top spot, with a lower predicted RV of 52%, but over a higher mileage of three years/60,000 miles. Other models making its top value list include the Lexus IS diesel (£22,020), the Audi A4 Cabriolet (£25,527) and Porsche Cayenne (£35,560), which retain 51%, while the Audi Q7 diesel (£37,077) holds 50% of its value.
By contrast, the Suzuki Liana 1.6 GLX auto (£11,755) holds just 19% of its new value after three years and 60,000 miles, according to CAP Monitor, while the Citroën C5 2.0 Exclusive Auto, (£20,092), holds 20% of its value. The Ford Mondeo Zetec 2.0 saloon retains just 22% of its £17,292 new price. Fleet managers will be keen to avoid such financial cul-de-sacs n
John Maslen is supplements and events editor at Fleet News
