Factor in depreciation when buying a car

Saturday, 02 July 2011

Car insurance customers have been told to factor in the depreciation of a vehicle when they make a purchase as it could save them thousands of pounds when they resell it, according to HPI.

The firm noted that there is not a clear formula for calculating depreciation, but comparing the car they are buying to its original price can help them make a judgment for the future.

Nicola Johnson, consumer services manager for HPI, said: "Depreciation can be a hidden cost and buyers who forget to take it into account could be in for a nasty surprise when they come to sell and find its value has plummeted."

She added that careful buyers research vehicles, and estimate how much tax will be, what the level of CO2 emissions are and fuel expense, which when they are added together helps to give drivers an idea of how much owning the car will cost.

Recently, Moneysupermarket.com told car insurance customers that the Vauxhall Corsa was the most popular vehicle for British motorists in 2010.

Posted by Rick Malone

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