What 2015’s new models really cost

New cars are always launched with a degree of hype. So let’s burst that balloon when it comes to some of the models that will become 2015’s most talked-about cars. I asked CAP Automotive to predict what a selection of recently launched motors will be worth at the end of 2017.

The figures assume a higher than average mileage of 60,000 a year over three years. But although they suggest the new Ford Mondeo will lose 66 per cent of its sticker price How 2015's new cars will depreciateover this period, that’s actually not too bad. Its bitter rival the Vauxhall Insignia will lose 79 per cent. The all-new Citroen C4 Cactus will also lose two thirds of its sticker price over three years. However, the regular C4 will shed 73 per cent.

The new Vauxhall Corsa is marginally better than the Cactus. It will lose 63 per cent of its price new. So that means in three years’ time you’ll be able to buy a Corsa for only a couple of hundred pounds less than the Cactus, even though they start off with £1750 separating them.

And then we start moving into the better performers. The Nissan X-Trail is easier on both eye and wallet than its predecessor. It’ll lose 57 per cent of its new value by 2017. It’s the same story with the new MINI Cooper. Best of my six big hitters for 2015 is the all-new Audi TT. By 2017 it will have shed 54 per cent of its price new.

CAP Automotive’s Philip Nothard explained: “These figures are actually quite impressive. You can take away six or seven per cent for the difference between 20,000 and 15,000 miles a year so they’re not as bad as they might look. Audi is definitely on a roll at the moment; the A1, Q3 and Q5 were among the best at holding their value in 2014 and the TT looks to be following in their wheel tracks. The C4 Cactus is a difficult one to predict because it’s such a different concept of car. And MINI historically holds its value like a premium car but that’s been dropping off with the increase in the number of models. A car that loses less than 50 per cent of its value over three years and 60,000 miles would have to be pretty special.”

So the Audi is best of a decent bunch. But it’s hardly stellar when you compare it with the best of 2014. Over the first three years of its life the Porsche Cayenne will retain an astonishing 72.4 per cent of its price new, although this is artificially high because of a lack of supply. The Range Rover Evoque five door is next on 71.6 per cent. And the worst? Things don’t look good for either electric or Malaysian cars. The electric Citroen C-Zero, Peugeot iOn and Mitsubishi i-Miev, all essentially the same thing, will now be worth just 14 to 17 per cent of their £33,100 price new. The Perodua Kenari will have lost a shocking 84.6 per cent of its thankfully for anyone who bought it very low £7462 sticker price.

Why web-buying services will never give good value

BLOG Dented car
I can now reveal exactly why some web car buying services will never give customers good value for money. It’s all in the cost of repairs.

In order to sell your car on for a tidy profit, these companies invariably need to repair small dents and scratches and refurbish scuffed wheels. And rather than taking those costs out of their existing profit margin, they boost the money they make further by knocking it off what they pay the seller for the car.

It means the price you’re quoted when you describe your car online is rarely what you’ll actually get. On top of that I have it on good authority that some of these firms give their employees bonuses the more they manage to knock down the quoted price.

Then there’s the cost of the repairs. The fee the seller is charged for having their car made good is a retail cost. What the companies pay to have the work done is a cheaper ‘trade’ price, further inflating their profit. One new web buying operation, Trusted Car Buyers, claims the retail prices for fixes can be as much as a third more expensive than trade.

By charging people what it pays for repairs, Trusted Car Buyers claims it can beat Webuyanycar.com’s (WEBAC) prices by £195. It’s admirable to eschew one of this industry’s more sordid habits, not so impressive to hold WEBAC up as a standard. Whenever I’ve compared prices from samples of such companies, WEBAC always comes out poorly. If Trusted Car Buyers wants to be taken really seriously, it should be comparing itself with the companies that give the best deals, not those that advertise the most.

Nearly new cars selling for more than their new price

Demand for BMW’s i8 hybrid supercar is such that used models are selling for nearly 50 per cent more than the sticker price. If you’d had the foresight to put your name down a couple of years ago, the i8 would have cost you £99,845. Now there are examples on used car websites with between one and 250 miles under their wheels going for £139,995.
BMW i8 appreciates in value
The i8 has created a perfect storm of desirability. It looks sensational on the road, as if beamed down from another planet, dealers have run out; and the waiting list for new models is around two years. Throw in that it’s expensive but reassuringly rather than overly so, is a high performance pioneer and according to people who’ve driven it, it’s really rather good too.

It’s not alone in appreciating. According to the Alfa Romeo website, you can buy a 4C from £45,000. Nice theory. Some Alfa dealers are complaining that they haven’t been able to get hold of any. Others say there are just 60 in the country. Whatever, models are going for £59,950 with a handful of miles on them.

The Tesla Model S is another car that’s bursting through the ceiling. The list price for the range-topping Performance version of the electric exec is £73,755. I’ve seen a dealer selling one for £89,990. Obviously the Alfa and Tesla are classics of the future. And I can see the Dacia Duster becoming sought-after when it’s older. Dealers are already managing demand by selling new models for more than the list price.

Not quite as predictable is the Jeep Compass. Of all the models in Jeep’s range I would have thought as one of the oldest and least rugged, the Compass is the one most likely to be discounted. On the contrary, dealers are selling it for a modest price hike compared to RRP.

How far you can drive for cheap fuel before it costs you

How far can you drive before saving money filling up costs you?If you go out of your way to find that fuel bargain, you won’t be alone. But how far can you travel before the hunt for the holy grail of cheap petrol or diesel starts to cost you? Fuel cost comparison website Petrolprices.com claims the lowest price for regular unleaded in my area is £1.22 a litre. The average is £1.25. Assuming a £45 fill up, I’d get 36.88 litres from the cheaper outlet, 36 litres at the average priced one. That’s a difference of 0.193 of a gallon, or in a 45mpg car, 8.68 miles.

So I could go just under nine miles out of my way before it starts costing more than it’s going to save me. Of course, the more economical my car, and the greater the cost differential, the more miles I can drive. I have nine fuel stations within five miles of my house, so chances are, picking the cheapest should save me money. The amount, however, is disappointingly low. If I’m covering 10,000 miles a year in my 45mpg car, the difference between £1.22 per litre and £1.25 is only £30.30 over 12 months. Still, I’d rather that was in my pocket than a fuel station’s till.

When buying new is cheaper than used – it’s all because of depreciation

Looks wild, depreciates even more wildly when it's bought as a new car (Picture  © BMW)

Looks wild, depreciates even more wildly when it’s bought as a new car (Picture © BMW)

Popular opinion among bar-leaning soothsayers is that used cars are always cheaper to buy and own than new. The simple logic is that the depreciation curve is at its steepest in year one and flattens off thereafter. However, CAP Automotive has given me the figures to bust the myth that you’re wasting money by buying a car from new.

The cost of running a car is split multiple ways. Many factors stay the same year in, year out when it comes to working out a cost of ownership. It doesn’t matter what car you run, if we’re talking like for like in terms of mileage, engine, specification and driver, the cost of fuel will be the same whether that car is brand new or one-year old.

Servicing and maintenance costs, however, will be lower in the first year of ownership than in year two because the car is likely to need a more extensive service in its second year. In three years on a car that’s been bought new, you’ll just have a single expensive service, in year two. If that car was bought as a one-year-old, over three years you’ll have the two expensive services of years two and four. And that can be a significant cost. Keeping a VW Up! fettled for three years will cost £848 if it’s bought new, £1183 if it’s acquired at one-year old.

Then we come to depreciation. Some cars cling to their value so enthusiastically that they’re actually more expensive to buy second hand than they are new, assuming 12,000 miles a year. Take the Range Rover Sport. Buy it new and it’ll cost you £59,465. Buy a one-year old car and CAP claims its value to be £58,250. “If a car holds its value like this, you’d be better off buying it new,” CAP consumer specialist Philip Nothard said. Extrapolate that over three years and the figures show that you’d actually be £2677 better off. “You’d be daft to buy it used,” he added. “At the moment it really is a new car market.”

Depreciation is still the driver of the cost of ownership. Ignoring cars wearing Bentley and Aston Martin badges, which can depreciate more in three years than the average UK wage earner brings home over five, let’s look at a performance SUV. The BMW X6 M (top of the page) will depreciate by £61,385 over three years if you buy it new. Buy a one-year old and you’ll ‘only’ take a £31,425 hit. The difference in total ownership costs over three years between buying new and used are £28,816 in favour of second hand.

Cutting to the chase: the cars that CAP Automotive claims will save you money by buying new are the Range Rover Sport and Evoque five door, Skoda Roomster, Porsche Cayman plus Audis A1 and S3. Those that will really cost you are prestige execs such as the Jaguar XJ, Audi A8 and VW Phaeton. No surprises there. More ordinary cars that barely cost you over three years if you’re running new rather than used include the Audi Q5 and A3, Nissan Juke, Skoda Fabia and Mazda CX-5.

Where these costs fall down is that they don’t take into account any discounts you might negotiate. And as dealers, egged on by manufacturer masters’ sometimes unrealistic demands, are desperate to shift new metal at the moment those can be significant. Forget conventional used over new wisdom. In some cases you’d be daft to buy a used car as the man says.

Peugeot HYbrid Air The car that runs on errr… air

BLOG Peugeot HYbrid Air (1600x1018)If I said one car maker had designed an engine that runs on air, you might imagine it would cost a king’s ransom. That’s when it goes on sale, which you might surmise wouldn’t be until about 2030. And anyway, doesn’t the whole notion of an engine fuelled by air seem a tad fanciful at best? Peugeot doesn’t think so. It has built one and it could be on sale within three years. But most importantly, if a HYbrid Air powered 208 was in dealers today it would be wearing a sticker saying £16,500 about the same as a diesel model.

Although called hybrid, rather than battery power accompanying petrol, the Peugeot system relies on compressed nitrogen. A tank of the gas, under very high pressure, pushes hydraulic fluid through a motor to generate power. It’s capable of around 30kW (40hp), but only for a very short time. That’s enough to get a car to 30mph, then after 300m the compressed nitrogen’s energy is exhausted. It doesn’t sound far but in the context of a big city centre that’s probably the distance between traffic lights.

The clever part is that the gas can be re-pressurised and therefore re-energised within 10 seconds of the internal combustion engine running. So a bit of idling at the lights and you’re ready to go again on air power. As with other hybrids, the car can run either on air alone, air in tandem with the petrol engine for what Peugeot calls ‘boost’, or petrol alone. In the boost phase, the engine would deliver the equivalent of 120hp. But a third of those horses would be free both in financial and environmental terms.

Although Peugeot has a prototype 208 model using this engine and claims 141mpg and 46g/km of carbon dioxide, that car uses lightweight materials and has aerodynamic tweaks designed to make it more windcheating. It would of course be correspondingly more expensive. But the exciting thing about this power source is that there are very tangible benefits to be had in an otherwise unmodified car: Peugeot reckons 94mpg and 69g/km which is well worth having.

Whether the HYbrid Air makes it beyond the prototype stage is down to whether Peugeot can find a partner and build sufficient engines to make it economically viable. I suggest, there is a sense and precedent that if something is right, build it and they will buy it, to bastardise the film tag line.

A version of this story was published in Daily Telegraph Cars

A clear view of the future

For years, replacing windscreens has been covered as part of comprehensive insurance policies. But we can no longer take it for granted.

Windscreen cover is currently a ‘free’ extra. It’s couched in this way so we think our kindly insurers are giving us something for nothing. Of course there’s no such thing as free in this world and we’re still paying for it. But ‘free’ things are easy to take away and that’s exactly what some cover providers, particularly on comparison websites, are doing.

Eliminating the cost of windscreen replacement enables a cheaper headline price. Knowing how many insurance policy buyers go for the cheapest possible cover these insurers take out screen cover and bingo! They can offer a lower price. The message is: ensure your windscreen is included in your cover or you could have an expensive surprise.

There again, the writing could be on the wall for ‘free’ windscreen cover any way. Anyone who thinks – as I did – that glass is glass, is in for some re-education. A new BLOG Windscreensreport by windscreen replacement giant Autoglass reveals that the simple windscreen will shortly be anything but. Car makers are working on adding systems such as eye trackers, augmented reality GPS and head-up displays to the windscreen. According to Dr Chris Davies, head of technical research and innovation at Autoglass, by 2020 there’ll be at least a couple of these systems on the road.

On the one hand, this is great. They’ll mean we don’t have to take our eyes off the road and thus make driving safer. They can also convey information about the driver to a third party meaning insurers can monitor people and reward or penalise them more accurately. On the other, it’s bad news. Dr Davies explained: “More exclusive, cutting edge products like this will generally see a higher price tag. Insurers will be required to take this into account as far as the pricing for premiums goes.”

So premiums could go up to take account of replacing this technology. Or windscreens may no longer be covered. I’m not saying this to scaremonger. Look back a few years and there’s a precedent. The advent of the panoramic windscreen introduced massive screens to everyday cars such as Vauxhalls and Citroens. Trouble was, they could cost the best part of £1000 to replace. The result was some insurers refused to cover them under the free windscreen section. Instead they were part of the main policy. And that meant a new windscreen stood as a claim and could have an impact on your no claims discount and therefore premium.

According to acquaintances in the trade, simply getting replacements was a challenge. The new breed of high tech windscreens is going to pose fitters such as Autoglass with similar problems. Dr Davies added: “More sophisticated technologies may require different fitting procedures and a higher level of expertise to perform additional actions such as the calibration of sensors. All of these factors can mean that the cost of replacement may be higher in future.”

So the ability for insurers to charge cheaper premiums because this technology will cut the number of accidents will be reduced by the expense of replacing the technology. However, Dr Davies said: “Glass technology will change. Companies are working on indestructible glass.” For drivers, that could be the final piece of the jigsaw, although I doubt companies like Autoglass are looking forward to that day quite as much.