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Cap hpi estimates the V60 D3 Momentum will be worth 38.3% of its new cost price after 3 years and 60,00 miles, making it an attractive purchase for new customers.
If you’re considering purchasing a new or used car, knowing about its residual value further down the line could save you a lot of money.
Buying a car with good residual values could mean lower monthly contract hire and personal leasing rates for owners. Furthermore, a good residual value will make your car a key competitor against rivals.
Below, Trusted Dealers provides prospective buyers with a guide to residual values.
What is a car’s residual value?
Residual value is the term used to describe how much a car is worth after several years; the higher the figure, the more the car is worth used.
Depreciation will occur
Depreciation is a given fact when you purchase any car. Despite the odd exception to the rule, almost every car will lose value over a period of time after you buy it. The rate of depreciation has a huge impact on the total cost of owning a car, so it’s well worth buyers considering a car’s residual value carefully before making a purchase.
New and used car buyers
If you are a new car buyer, you should be thinking about purchasing a car with a high residual value as you’ll get more back when you come to sell it. Used car buyers will benefit more from those cars that lose value quicker, as these are cheaper to buy second hand.
Hidden costs explained
Depreciation can often be viewed as a hidden cost because you don’t spend the money each month, but when it comes to selling a car its residual value can have a huge impact on its price.
If you’re considering buying a vehicle, using websites such as Cap hpi to research the car’s residual value are essential.
Residual values on similar models really can differ by significant amounts of money, so it literally pays to check the expected depreciation of a car before you buy it.
Remember the facts
It’s important to remember that the higher the residual value of a car, the higher its day-to-day running costs might be, and you may have to pay more for a finance deal such as a PCP agreement. Predicting which cars depreciate the slowest can be hard, but there are three golden rules to remember:
How to cash in on residual values
Residual values from cap hpi will show you how much a car will be worth in 3 years and 36,000 miles of driving. For example, a car with a 50% rating will be worth half its original value, while one with a 35% value will be worth just over a third of the list price.
If you are buying new, choose a car with strong residual values – there will be less difference between what you pay for it and what you get back from the new buyer.
Financing a car
If you plan to finance a car, residual value is even more important because your monthly payments will be calculated based on the difference between the Recommended Retail Price (RRP) and the predicted value at the end of your contract. One of the key things to take note of when comparing the cost of financing your car is not the list price, but the monthly instalments you’ll pay.