Key Findings;
- The overall average price an ICE car depreciates is 67 pence per mile.
- The average ICE Car depreciates £4,669.90 a year.
- The overall average price an EV depreciates is 55 pence per mile meaning a loss of £3,833.50 a year.
Here at LeaseLoco, we’re constantly looking for ways to educate our customers on why leasing is more beneficial than buying a car. One of those reasons is depreciation. Depreciation is the difference between what you paid for the car and the amount you sell or trade it in for, which is usually far less than what you spent to acquire the vehicle.
One of the biggest contributing factors of depreciation is mileage. Basically speaking, the further a car has been driven, the less amount of money you’ll be able to gain back when trying to sell it. This is because the mileage gives a good indication of a car’s mechanical wellbeing. The more miles it’s done the more likely it’ll need parts replacing/updating. With this in mind, we decided to take a deep dive into mileage and see just how much it affects car prices in today’s market.
Internal Combustion Engines Depreciate £4,669.90 Per Year
To do this we analysed a popular online car marketplace and compared the prices of the UK’s most popular used cars against the number of miles the car had done. What we found was that overall the average internal combustion engine (ICE) depreciates around 67p per mile. This means that today, the average car will depreciate £4,669.90 per year, based on a recent study that stated the average annual mileage pre-COVID was 6,970 miles a year.
EVs Depreciate Slower Than ICEs
We also investigated what this meant to the growing electric vehicle market. As more and more vehicles come onto the market, and many motorists are opting for electric over ICEs, the used car market for EVs increases, which means today, we’re able to analyse this market a lot more accurately than we could have done before. We discovered that EVs depreciate at a slower rate than ICEs, overall averaging a depreciation rate of £3,833.50 per year, £836.40 less than ICEs do. This means that EVs depreciate at around 55p per mile compared to ICE’s 67p.
But what about individual cars? Which, out of the UK’s favourite used ICE and EV cars depreciate the least?
MINI Hatch Electric Found To Depreciate The Most
After analysing the UK’s favourite ICEs and EVs on the used car market, our study finds that the MINI Hatch Electric depreciates the most, losing £1.82 per mile. If we use that study that states that the average annual mileage is 6,970 miles a year, that means over a 12 month period, the MINI would depreciate around £12,657, around £264 per week.
At the other end of the scale, where the cars depreciate the least, the best three cars are all electric, with the Vauxhall Corsa EV depreciating the least, only dropping 16p per mile, which translates to £1,128 per year and only £23.50 per week.
Aside from the MINI Electric, the next three cars are all internal combustion engines. The BMW 1 Series comes in 2nd, depreciating £1.58 per mile. A total of £11,010 per year and £229 per week. Then comes the Ford Focus, depreciating £1.19 per mile, £8,294 per year and £173 per week, followed by the BMW 3 Series, depreciating £1.03 per mile, £7166 per year and £149 per week.
The UK’s favourite used ICE car, the Ford Fiesta, sits close to the bottom of the pile, only depreciating 24p per mile, £1672 per year and £34.82 per week. Then, surprisingly, despite the MINI Hatch Electric topping the leaderboard, the ICE version fares relatively well, depreciating the 2nd best at only £4 more than the Fiesta.
Leasing With LeaseLoco
As you can see from our study, despite electric cars performing better overall when it comes to depreciation, no matter what car you buy, it will almost certainly depreciate in value.
When leasing, however, you don’t need to worry about depreciation. With LeaseLoco you can drive away a brand new car, at an affordable rate, and when your contract is up, all you have to do is send it back and then pick another brand new car or simply walk away. No hassle and no financial burden.
If you’re interested in leasing, LeaseLoco has thousands of car lease deals ready for you to choose from. And if you need any help, please don’t hesitate to get in touch as we always have someone on hand to advise on anything you may need.