60,000 miles on the clock
Potential used car buyers continue to discriminate against vehicles
with higher mileages, according to EurotaxGlass’s.
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The data supplier compared the trade prices and mileages of
over 200,000 vehicles and identified a steady increase in rates of
depreciation as odometer readings rise. The analysis
indicates that for an average three-year-old car, the highest rate
of depreciation was apparent between 60,000 and 100,000 miles.
EurotaxGlass’s used as its benchmark a three-year-old car with a
typical 40,000 miles. If the same make, model and age of car
had covered 50,000 miles, the trade value would be 4 per cent
lower. However, between 60,000 and 100,000 miles, the
financial penalty increases to 5 per cent for each multiple of
10,000 miles.
“As soon as a car passes the 60,000 mile threshold, the
penalties increase because perceived desirability falls,” commented
Adrian
Rushmore, managing editor at EurotaxGlass’s.
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By GlobalData“There remains an additional stigma attached to a used car with
more than 100,000 miles, and many owners avoid passing through this
psychological barrier during their period of ownership for fear of
instant devaluation. The fact is that the rate of
depreciation actually slows after this threshold has been
reached.”
Using the same example of a three-year-old car, beyond 100,000
miles the additional fall in trade value per 10,000 miles covered
reduces from 5 per cent to 3 per cent, dropping further to 2 per
cent after 200,000 miles.
EurotaxGlass’s also found that cars with below-average mileage
do not benefit from an improvement in trade value comparable in
scale to the penalty incurred where mileage is above average.
Again, taking the example of the typical three-year-old used car,
for each 10,000 miles under the expected 40,000 miles the trade
value improves by just 2 per cent.
Historically, higher mileage diesel cars shed less of their
value than petrol cars with the same mileage but this is now no
longer true, Rushmore said.
“The price adjustments for diesel cars in respect of mileage now
generally follow the same pattern as petrol cars. Up until 18
months ago the penalties for diesel models were smaller, but then
so too was the supply.”
The fluctuation in the supply of used cars throughout the year
affects the prices that will be paid.
“During times of high supply – usually in the wake of the two
annual registration plate changes – the trade discriminates against
high mileage cars,” explained Rushmore. “Conversely, in the
first three months of each year there is usually less choice, and
so prices creep back up.”
