Ford Transit Outsourced

Ford were subject to much criticism in the House of Commons yesterday after they announced they were moving production of the Ford Transit van, the ubiquitous van of choice for small businesses, from Southampton to Turkey.

MPs were particularly annoyed by the shut down of the Southampton plant coming after a £80 million loan guaranteed by British taxpayers was given to Ford by the European Investment Bank to modernise it’s Turkish plant. MPs are concerned the money was used by Ford to prepare the plant so the Southampton plant could be shut down, although Ford denied this. In the move 500 jobs will be lost directly in Southampton and more will go at suppliers, it’s not clear how many are being created in Turkey where the van is planned to be produced at the existing Ford plant in Kocaeli.

Ford has seen it’s share value increase due to the move, but we shouldn’t expect it to have much impact on the value of the ever popular Transit van. Unlike in the US where there was a substantial consumer boycott of Japanese car manufacturers over the fear they were taking American jobs, British car and van buyers tend to care mostly about value for money.

So are the Ford vans a good investment compared with their competitors today? New they currently start from £17,995 for the basic model that includes most things a driver would want except perhaps front fog lights which are an optional extra, as well as the bodyside mouldings, cruise control and full wheel covers all of which cost extra. Every time you buy a vehicle new as soon as you are handed the keys you’ve lost a substantial amount in instant depreciation – a second hand 2012 model loses about £3500 in this. A 2011 model loses another £3000 and sells for about £11,500 but then thankfully the depreciation slows to typically between £500 and £1000 a year. If you’re looking for a bargain we’d suggest getting a three year old van which hasn’t clocked too many miles.

While Ford might be the most popular brand, there’s others out there. Citroen’s Dispatch model are available new from £14,735 – substantially less than Ford’s Transit. The average price of a second hand van from this year is £12,000 which represents a much more reasonable instant depreciation, dropping to £8,000 for the 2009 model.

The Germans also make vans with Mercedes and Volkswagen being some of the main players. The Volkswagen Transporter starts at £16,960. The average second hand price in 2012 is higher than this at about £18,500, but this mainly represents the fact that the majority of buyers don’t go for the cheapest option on this van. The 2011 model knocks £2000 off the 2012 price, and the 2010 model is yet another £2000 lower, followed by a £1500 drop to 2009 from which point depreciation thankfully slows to more reasonable drops of between £500 and £1000 a year from a few years.

All the vans seem to follow similar depreciation curves, with reasonably fast losses in the first few years that slow down substantially. Remember though each second hand van is different and the key factor that will affect value is mileage. A van used lightly, for instance the daily trip to a food market to get supplies for a restaurant, will depreciate much slower than a van used for constant deliveries during the working day.

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Beat the Congestion Charge

While depreciation is the hidden highest cost of car ownership for most road users, except those who were particularly savvy with their purchase of course, there’s one group that has another charge that can often be higher. We’re talking here of those who regularly travel through the London congestion charge, whether commuting to work there and just passing through. The congestion charge is currently £10 a day for those who drive in the zone from 7am to 6pm on a weekday, which for those who commute into work could mean £50 a week or £2400 for a 48 week year. But not all vehicles have to pay it, so if you’re desperate to keep your wheels despite the horrendous traffic but don’t want to pay the charge you’ll want to look at a selection of vehicles that emit fewer then 100g/km and also meet the Euro 5 air quality standard. Confused? Well the Euro 5 part is easy if you’re car is from 2011 onwards as it will automatically qualify, and the 100g/km number is more commonly known as emissions and is easily found on car manufacturers websites.

Volvo C30

Don’t worry that you’ll have to get an electric (or even a hybrid) to meet these requirements and beat the charge. You also won’t be confined to a small car that looks out of place for a city job. And it’s not all Ford, Toyota and VW either – more business styled brands such as Audi and Volvo also have great cars that are exempt from the congestion charge.

In our opinion the most stylish of congestion charge beating cars is by car the Volvo C30 Drive. Big enough to be a family car but with looks that won’t look out of place in the City, this vehicle just squeezes into the free range at 99g/km on the 1.6 diesel DRIVe model. But how do they stand up to depreciation? The early 2011 version would probably sell for a tad over £12,000 in a private sale today, a third drop form it’s brand new price. It’s 2007 C30 (not the DRIVe) fairs even worse, down to about a third of it’s original price today in a good private sale.

Audi A3

If the Swede’s reliance on American design for the Volvo isn’t your cup of tea however the Germans have an Audi A3 1.6 TDI which also just squeezes into the free-zone for driving in Central London. Lacking in some of the technologies that make the A3 what it is (start-stop is excluded for instance), it your call on if this is a price worth paying. How well do they depreciate? Only slightly better than the Volvo, an early 2011 model was originally £18,314 but now is worth slightly under £13,000 in a private sale in top condition. A comparable A3  from 2007 like the Volvo maintains only roughly a third of its value, both of them losing around £10,000 in just five years. Still if this is your commuting car you’ll have saved more with both in congestion charge in that same period.

Other cars to look at are of course the Toyota hybrids, and the less polluting Ford Fiesta’s, Volkswagen Gold’s and Skodia Fabia’s among others. None of the cars probably match up to your job title if you’re driving into Central London daily, but you can always keep the flashy car for weekends.

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American Election Special: Bailout Car Values

With America voting Obama back into office for another four years today,  one of the issues of the election was decided on is the bailout of the American car industry – specifically the car giants of GM and Chrysler. We’re therefore going to do an election themed post on car values of brands manufactured by the bailed out companies. In the UK the most seen of GM’s brands is Vauxhall, although their cars don’t seem particularly American and we’ve discussed a few of them recently so instead we’re looking at the more classically American brands of Cadillac, Chevrolet, Dodge and Chrysler.

A Cadillac BLS with distinctive front grill. Photo credit: Rudolf Stricker

Cadillac is perhaps one of the most American of all car brands with relatively few reaching our shores in the UK. Their compact executive car, the BLS, is one of the most distinctive with a much larger front grill and lights than comparable cars from European and Asian manufacturers. Parts of the car might look slightly familiar though: this is because the car was based on a Saab 9-3 from the Swedish car manufacturer. The BLS is no longer in production (it was actually built in Sweden and Russia before being sent over to the States), but second hand models are still available. This isn’t a car that’s maintained value well though – Top Gear’s James May’s opinion that it wasn’t a good option compared with Audi or BMW certainly rings true here. A 2011 version would have cost £23,145 when brand new but now would get slightly less than £10,000 in a private sale even in great condition.

Not every American has a pick up truck, but this one has maintained value quite well this side of the Atlantic.

While Americans can do traditional executive cars like the BLS, admittedly with a twist, they come into their own when it comes to big vehicles. For instance the stereotypical American vehicle the pickup truck. Dodge’s Ram is one of these beasts of the road. Although now spun off from dodge officially, they’ve been manufacturing trucks under this name since 1981. These cars were never cheap to buy in the UK, and the expensive price of fuel here (currently about three times the price our American cousins pay) meant that keeping them on the road is a nightmare. Still their value holds up better than the Cadillac, with a 2008 model, now four years old, still going for slightly less than it’s original price. You could pick up a good condition one of these in a private sale for just over £20,000. If you have one from three years earlier however you’d be looking at £8000 less, but for a seven year old car keeping about a third of it’s value isn’t too shabby. Although you’ve probably spent more on fuel than the new price of the car in those seven years!

Retro look PT Cruiser didn’t succeed like Mini’s do in maintaining value

And a final honourable mention to one car you do occasionally see on the British streets, the Chrysler PT Cruiser. The car has a bit of a cult reputation in the USA as a bit of a losers car, and the values of these second hand really do reflect that reputation. A new model in 2009 would have cost you just over £16,000 but today you wouldn’t even get £3000 for one in good condition in a private sale from that year. Not a good investment!

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New Cars Announced this Month

Every time a model gets a refresh there’s a significant knock on affect on the value of cars of the previous model. No one wants the out of date version which as soon as a new model is announced always looks dated – the same is true for many things from smartphones to televisions. So with a new Porsche, Mercades S-Class, Toyota Aygo and Mini Countryman announced yesterday and today plenty of people are going to see the values of their cars plummet massively in the near future.

The 2010 Mercedes S-Class. These currently got for about £35,000, significantly under the current new price of £61,140

If you own one of these cars, or another that’s due an update soon, what should you do? If you’re perfectly happy with your car and not bothered about the depreciation that will come with an update the answer is simple: keep it. If however you’re watching your bank balance closely it might be time to switch vehicles. While values are typically hit as soon as a new model is announced the biggest decrease will come when the cars start rolling off the production line and onto the streets, so you’ve typically got a few months to sell before the real depreciation hits.

It’s been no secret that Mercedes have been working on a new S-Class, with images of tests leaking out from extremes of deserts and the Arctic. The car hasn’t been officially unveiled yet – we’ll have to wait for the April 2013 Shanghai Motor Show for that – but details are slowly emerging of the new car. The car is jam packed with the latest in automobile technology that will put previous models to shame (and sadly have an even bigger affect on their values). The car has ‘6D Vision’, a system that will automatically detect pedestrians who might step into the road in between parked cars, LED headlights that automatically adjust to lighting conditions and a boot that opens when you put your foot under the bumper. Even if you’re not in the market for an S-Class these innovations might be making their way to you in future: the model has pioneered technologies that are now standard like air bags, advanced breaking systems and climate control.

2012 Mini Countryman. The new model will now also be available with a racing red and a copper finish.

Mini has also announced a new Countryman model for 2013. The changes here aren’t as comprehensive and apart from the paint colours the exterior is largely the same, meaning that value depreciation isn’t going to be as much for this model as the S-Class. The interiors are seeing quite a few improvement however, with a new console layout that among other things gives the driver control over all the electronic windows. Despite being a 2013 model the car will be available this month from £16,510 so if you’re going to be selling an old Mini Countryman our advice is do it now before values drop.

Lastly there’s been reports in AutoExpress of sightings of a new Toyota Aygo. It’s still a while off launch – sometime in 2013 – but as rumours start to stack up the anticipation will lead to values of current models decreasing. Still with the entry level car starting at £8000 the depreciation on this will be more manageable than the Mercedes S-Class which starts at £61,410, over seven and a half times more, a price that will possibly see depreciation of more than the price of a new Aygo in the coming months!

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James Bond Car Values

With a new bond movie in theatres it seems appropriate to have a Bond themed blog post today. 007 franchise has always had cars, often with added features that aren’t on offer to the ordinary public such as missiles and invisibility, and some of these cars now have very attractive values as classic cars. Some models driven by Bond on the other hand are more likely to be sold for scrap.

Perhaps the quintessential Bond car is the Aston Martin DB5 from the everyone’s favourite Bond movie Goldfinger. While the car you’d buy won’t have an ejector seat or machine guns – although you could fit a GPS device which would probably be better than Bond’s radar tracker from the film. We could a 1965 (Goldfinger was released in 1964) DB5 for sale for €276,500 (£223,000) online – showing the car has truly achieved classic status, in part due to its role in the film.. The actual car seen in Goldfinger apparently fetched £4 million in 2010, although it has long lost its advanced weapons technology.

Not all Bond cars cost this much though. Some classic models driven by Bond in the films are surprisingly cheap today. You could buy them for less than a new cheap family car, making them perfect buys for any mid-life crisis impulse purchase. Diamonds are Forever sees Bond pull up in a Ford Galaxie 500 sedan when he meets Felix the CIA operative, we tracked down a 1967 version in St. Louis in the USA on sale for $5 under $10k, equivalent of £6200. Not bad for a car considerably classier than anything on sale today.

Bond drives three different Lotus Esprits, two in For Your Eyes Only (1981) and one in The Spy Who Loves Me (1977), we couldn’t find any models from those years but a 1983 Esprit is currently in AutoTrader for £8995. This is a red model similar to the one driven by Bond in the Italian ski resort in For Your Eyes Only which is probably a better omen than the white model which self destructs earlier in the film.

Rolls Royce Silver Shadow

Bond didn’t just drive sports cars however. A fine British Rolls-Royce Silver Shadowwas seen in License to Kill, the underrated 1989 Timothy Dalton film. These aren’t cheap cars to keep on the road, but you can pick up a model fairly cheaply, a white 1987 model is currently on AutoTrader for £6500. The model of car also featured in two other films: The Man With The Golden Gun (1974) and The World Is Not Enough (1999). A 1975 version can be picked up for as little as £3995 meaning this is one of the cheapest and classiest Bond cars to get your hands on.

Bond typically drove classy cars and sports cars, but occasionally rode something a bit chunkier. For instance in Octopussy he’s seen driving a Range Rover Classic with a horse box attached. These can be bought for less than £2000 today, although better condition models go for far more despite their age – we spotted one from the 1970s listed for over £7000. Talk about value retention!

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5 Ways to Cut the Cost of Driving a Car

With the annual cost of running a car in the United Kingdom in the thousands of pounds at a time when many of us are suffering from the recession it’s more important than ever to cut down unnecessary costs. Luckily there’s a load of ways of cut the cost of motoring, here we feature five great ways to start saving today.

Annual cashback on fuel can be worked out by multiplying your weekly spend by 52, dividing by 100 then multiplying by the cashback percent.

1. Fuel Cash Back

There’s a lot of way of get discount on petrol, from Supermarket loyalty schemes to employer-garage deals. But one way everyone can save on every garage is to get a cashback credit card that offers cashback on petrol. If you set the direct debit to pay off the full balance monthly you won’t have to worry about getting into debt, so the card can be a great way of earning back some of your spend. Some cash back cards like the Santander 123 card pay 3% on petrol, so say you spend £60 a week on petrol then you’d be able to earn back £93.60 over a year. The Santander card is limited to a £300 a month spend for cashback, but there’s nothing stopping you having several cash back cards if you’re likely to go over this limit.

2. Use a council-run MOT centre

Worried that next time you go for an MOT the garage won’t pass it unless you have some expensive repairs done that you’re not even sure you need? Luckily UK councils have over a hundred centres in the UK that only do MOT test, so if there’s anything wrong you’ll be able to choose a garage to do the repairs to ensure you don’t get ripped off.

3. Drive more economically

It’s possible to save up to 30% of fuel costs by driving in a way that conserves fuel. How do you do this? Only accelerate slowly as over accelerating burns more fuel without increasing speed. The same is true of breaking: allow the car to slowly break, if possible by itself, rather than over using the break pedal. And make sure you’re in the highest gear you can be at your current speed, it might mean reaching for the gear stick a few more times but being in the correct gear is essential for fuel economy.

4. Shop around for car insurance and breakdown cover

Each price comparison site has different companies listed and none of them cover them all. It’s best therefore to check all the price comparison sites you know of (big ones include MoneySupermarket, GoCompare, and CompareTheMarket). Some insurers like DirectLine aren’t on these sites so are worth checking separately. You’d be surprised by how much spending a little extra time searching can save you. Look to see if insuring others in the household at the same time can save you money – often the price of insuring two on the same policy will be only slightly over insuring one person.

5. Clubcard points for breakdown cover

Tesco’s clubcard points from doing your grocery shopping at Tesco can be spend on RAC’s roadside recovery policy at a discount. Spending your points on this rather than groceries will often make them got three times as far.

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What Cars Not To Buy: Fastest Depreciators

If you’re in the market for a new car you’ve probably been looking at factors like price and fuel efficiency. We’re not going to blame you for these, especially not the latter given how high the price of petrol has gone. But if you were to sell your car in a years time it’s likely the vast majority of the expense involved in owning the car would be an invisible one: depreciation. Some cars maintain value remarkably well, we covered some a week ago, but others drop by as much as half of their value within the space of a year. Buying one of these cars is best compared to emptying your bank of £10,000 and setting it on fire.

Vauxhall Astra bought new won’t retain value well – consider buying last years model second hand instead

The worst offending brands are the American-owned British-only brand Vauxhall and two French brands, Renault and Peugeot. Not all of their cars lose value as quickly as their worse offenders, but it seems that the cause of depreciation is to some extend poor brand value: these models are associated with much lower price points traditionally than what the newest models are sold for today, and this has psychological affect on the price people are willing to pay for them second hand.

The biggest jump we saw in this class over a single year was the Vauxhall Zafira which was priced at half its value, £11,000 from an original £22,000. The Astra and Corsa suffered only slightly less. Over a three year period though a French brand took the lead, with a Citroen Xsara Picasso falling to 20% of its original value.

It’s not just the lower end of the market that suffers from depreciation though. Traditionally expensive brands like BMW and Volvo also see massive depreciation in some models. This is partly due to the keeping up with

BMW 5 Series (pictured here) Lost Value Fast, but the 1 Series Retained Value.

the neighbours attitude of those who buy these cars. A Volvo S40 for instance drops by around 58% over three years while a BMW 5 Series 520d SE dropped by 54% in the same time frame. BMW also had a car in the least depreciating list (the 1-Series) so the brand has some real discrepancies when it comes to depreciation.

It’s impossible to tell if the same brands will hold value in future for certain, but we can get some indications. Are the manufacturers offering heavy discounts for their remaining stock of previous models? This is a common cause of depreciation if so and should put you off buying new from them (except their heavily discounted cars of course). Similarly is the car in question overpriced for the perception of the brand or is it the sort of car that companies will purchase for their sales reps. Both these factors tend to lead to fast depreciation as people will be unwilling to fork out for a brand their don’t see as valuable, while company cars get sold on after just a few years so that sales teams can impress by driving around in newer cars. This creates a flood of cars onto the market that aren’t ideal for other market segment needs.

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Peugeot Bailout: Are the cars still worth it?

France has always been rather particular in its choice of cars. Fiercely nationalistic in what they drive you’re more likely to see Peugeot, Citroen and Renault on the streets of Paris or Marseille than any non-French city.

The Peugeot logo will be seen for at least a little while longer.

Peugeot is in trouble though. The market for new cars shrank massively in the recent recession while car production capacity was at record highs. While consumers turned towards second hand cars those seen as less good value as new vehicles suffered most, and Peugeot was one of those brands whose car models lost their value at quite a fast pace.

Today the French President François Hollande handed Peugeot £5.66bn of French taxpayers money to prevent the carmaker collapsing. This money will largely go towards loan guarantees allowing the company to continue selling the cars on finance to customers without worrying about if the loans will be repaid.

Understandably other car manufacturers aren’t happy with this. Volkswagen, who have not needed a bailout, were looking to take more of Peugeots market share as the group suffered.

If you’ve got a Peugeot parked in your drive what does this mean to you? Well it’s probably good news as it will mean spare parts will still be in production and the dealer network that can help you repair complex car faults will still exist. This will have a knock on effect at maintaining value as demand for cars that are hard to repair is obviously lower than ones where spare parts are easily available.

The deal is also good for anyone who works in a Peugeot factory, as the government has forced Peugeot to reconsider a planned plant closure and bring employees onto its board. But unless it can turn its fortunes around quickly this will only be a temporary reprieve.

François Hollande bailed out Peugeot to the tune of 7 billion Euros. Photo credit: Jean-Marc Ayrault. CC BY 2.0

In the June to August period it’s sales fell 4%, which is more significant when you think of the relatively small margins car manufacturers operate on. They’re not the only ones facing problems – Ford today announced it will shut a Belgian factory with the loss of 4300 jobs due to low demand in Europe. It’s unlikely Ford is going to disappear anytime soon if Obama gets re-elected, but we might see less of them in Europe. Will France be as willing to continue to bailout their automobile industry as Obama was? They would like to, and François Hollande seems pretty committed to doing so, but they’re more committed to the European project and it’s possible rival European car makers will use the EU to prevent France propping up its failing car industry at their expense.

So is it a good time to buy a Peugeot? If you can get a good deal on one then don’t be put off by recent events, but generally a new Peugeot has never been the best value retainer. If the keeping open of the plant set to close leads to an oversupply we might see some good discounts in future months, but at this stage this is purely speculation. Second hand good deals can be had and the brand generally is good quality and hasn’t suffered from the constant recall issues other brands like Toyota have seen in recent years.

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Electric Cars – Gimmick or Good Value?

When choosing a car no one considers getting an electric car. Yes, we might consider a hybrid but for most the choice is still between diesel and petrol. So has the government’s £11 million spend on encouraging us to switch to electric vehicles gone to waste?

Grants for those who want an electric car can be as high as £5000, meaning that there’s a significant incentive to consider putting up with the inconvenience of charging these cars in order to save money on the initial purchase price. And if you regularly commute in central London you don’t have to pay the congestion charge in an electric vehicle. Plus driving 100 miles can be as cheap as £2.

They’ve also installed 1600 charging points across the country. At first glance this might sound impressive, but consider that the UK has 160 districts with a population of more than 127,000, even if these each had 10 charging stations each it’s highly likely you’d run out of fuel somewhere inconvenient.

But electric cars can work for some. Those who exclusively travel in a city with charging points or who only take short distances from home might see real benefits from using an electric car in terms of costs, especially with the subsidy available.

The government is predicting tens of thousands in the next few years will be driving on the roads. Most of those already there are used by businesses, for instance as delivery vehicles, where they have the infrastructure and money to justify investing in charging equipment.

There’s only been just over a thousand electric cars registered in 2011, but this is a massive increase on the 111 that were registered in 2010. In this light the UK government’s target of 1.7 million by 2020 seems a bit unrealistic.

Price is a major factor. Despite the subsidy electric vehicles are considerably more expensive than alternatives and as the technology is so new depreciation costs aren’t really known yet. The latest Renault is perhaps the cheapest at £17,500 but there’s a catch: you rent the battery for about £1000 a year, but just swap it for a fully charged one when it runs out.

There’s technology being developed, and already in production, that would allow cars to charge themselves without ever even having to be plugged in. Perhaps the roads of the future will include inductive charging plates to allow cars to literally get their power from the road below them, but this remains a long way off and the investment required in building this into existing roads would be gigantic. If fuel prices continue to rise however this might not be as far away as it seems.

We’d suggest if you’re looking to look after the environment but still want to get great value in most situations an electric car wouldn’t be your best option yet. A energy efficient hybrid is a good middle ground option until more charging stations are in place and typically aren’t as expensive as pure electric vehicles. Hybrids often have better resale value than non-hybrid equivalents so you’re also probably going to be losing less money in depreciation by going with a hybrid rather than a traditionally fuelled car.

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Petrol vs. Diesel

Anyone buying a car is faced with vast a range of options that they don’t find with most other purchase decisions. Among the most important of these for the cost of running the car and how it will retain value is whether to go for a petrol or a diesel car. The best decision isn’t the same for everyone or every type of car – otherwise one would have become dominant like in the VHS vs Betamax battle.

Traditionally people thought of diesel as the option for those who wanting to run their car more cheaply but didn’t mind the relatively lack of performance that came with using it. However there’s been a lot of changes to the technologies in fuel refining since this was true and hence you can now have a lot of fun and performance with a diesel yet at the same time prices have converged so it’s no longer always the case the diesel cars are cheaper to run. For all the benefits this has brought it makes choosing between the two fuels even more confusing.

You can make savings by going with diesel if you have high mileage.

Diesel cars will usually require less fuel than petrol cars to go the same distance, often around 30% less. This fuel economy factor means that despite diesel being more expensive than petrol, you’ll usually pay less to go the same distance. You can compare the miles per gallon (MPG) figures when buying a car to see how much fuel is needed. Note however that MPG figures aren’t obtained in real-world driving, so looking for ‘True MPG’ figures from car magazines and other sources is usually a better option but not always available, especially for newer cars that haven’t been tested by these publications yet.

Although diesel cars are more expensive to repair.

While generally diesel cars are cheaper to put fuel into, there’s other cost factors involved. Diesel cars typically cost more to purchase (diesel fuel isn’t as refined as petrol so the equipment to run off it in the car has to be more complex). Repairs to their engine are usually also more expensive, often because petrol cars are more common so there’s more spare parts for petrol engines available. On the other hand you’ll usually be paying less road tax because the emissions are lower on diesel cars. Value retention will depend very much on the car in question and a good way of finding out is simply to compare similar vehicles (if buying new) to see how the diesel vs petrol question affected their value over time, for instance if you’re going for a new Audi A3 check how much a five year old petrol and a five year old diesel A3 are valued today as this is likely the best indicator of how much the current models will depreciate by.

So what factors should allow you to make the decision based on running costs? If you’re going for an expensive car typically the upgrade to diesel will be a much lower percentage of overall cost so not as noticeable than if you’re going for a cheaper vehicle. If you’re just driving to the shops and to pick up the kinds from school then a petrol car might work out cheaper, if you’re a salesperson or have a lengthy commute the cheaper fuel costs will really add up to big savings so diesel might be the best option.

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