BUYERS OF NEW HATCHBACKS BEWARE:
EurotaxGlass’s has uncovered a ‘depreciation trap’ affecting some of Britain’s best-selling cars. The publisher of Glass’s Guide has revealed that five-door variants of some family hatchback models, such as the Vauxhall Astra, Citroën C4 and Renault Mégane, suffer from significantly higher rates of depreciation than their three-door equivalents.
In the case of a Vauxhall Astra 1.6 Design, a five-door model bought last March (’06-plate) would have had an identical list price to the three-door version, yet just one year and 12,000 miles later the trade value of the five-door model is £1,250 less than the three-door (see Table 1 below for details).
The trend is all the more remarkable given that some of the affected five-door cars have a list price up to £500 greater than their less practical three-door siblings. EurotaxGlass’s reports that a five-door Citroën C4 1.6 VTR Plus bought a year ago would have cost £400 more than the three-door model, but would now be worth £175 less.
Similarly, a five-door Renault Mégane 1.6 VVT Dynamique bought in March 2006 would have cost £500 more than the three-door model with the same engine and specification, but after one year and 12,000 miles the five-door has a trade value just £25 greater than the three-door car.
“These three cars have very clear visual differences between the three- and five-door variants,” comments Jeff Paterson, Senior Car Editor at EurotaxGlass’s. “The sportier appearance of the three-door models helps to give them broader appeal compared to their five-door siblings, in particular attracting style-conscious younger buyers who are less concerned about rear-seat accessibility. In the used car market the higher level of demand for three-door hatchbacks translates into stronger residual values.”
Paterson continues, “With other cars in the C-segment, such as the Peugeot 307 and Volkswagen Golf, the visual differences between the three- and five-door models are more subtle and consequently the differential in residual values is less marked.”
Another factor influencing price differences between some three- and five- door models is supply. Paterson concludes, “Five-door models are preferred by rental companies, responding to demand from their customers. This means that, when these cars are offered to the motor trade after six months, there is a significant imbalance of supply, depressing prices for five-door models.”
Table 1: comparison of retained values of three- and five-door family hatchbacks
Vehicle Cost new
Glass’s trade value after
12 months and 12,000 miles
Retained value (as proportion of cost new)
1.6 Design three-door £14,862
1.6 Design five-door
1.6 VTR Plus three-door £13,907
1.6 VTR Plus five-door
1.6 VVT Dynamique
1.6 VVT Dynamique
1.6 S three-door £12,512
1.6 S five-door
1.6 FSI S three-door £13,707
1.6 FSI S five-door
About Glass’s – part of the EurotaxGlass’s Group
William Glass first published Glass’s Guide to Car Values in 1933, and July 2003 marked 70 years of the motor trade’s ‘Bible’. Today, Glass’s offers products and solutions that are essential at every stage of the vehicle lifecycle. From key valuation, technical and fleet management data, through to estimating, bodyshop and dealer management systems and web-based services, Glass's has information that the motor industry relies on.
Glass’s also now provides valuation data direct to consumers, via the Glass’s Motoring Guide website (www.glass.co.uk).
In 2000 Glass’s merged with Eurotax, forming EurotaxGlass’s - Europe's leading supplier of automotive business intelligence across 29 countries. The merger has created a group with unrivalled resources and knowledge. This has paved the way for many innovative developments, not least of which is the pan-European Market Intelligence Service that provides bespoke data and analysis for the industry at large.
Visit EurotaxGlass's online at www.eurotaxglass.co.uk (trade), www.glass.co.uk (consumer)
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