City cars move ahead of premium-segment cars in residual values league table
6 April 2009

City cars hold on to their value better than any other market segment, a study by used car experts Glass’s has found.

The study, which measured the retained values of three-year-old cars with an average of 36,000 miles on the clock, found that, as a class, city cars (eg Ford Ka) retain an average of 49.5 per cent of their value after three years.

The last time Glass’s published a similar league table, three years ago, the city car class came ninth out of 10 major market segments.

“The improvement in values of city cars is all the more remarkable when you take into account the massive growth in the supply of three-year-old examples,” said Alan Rushmore, managing editor of Glass’s. “Annual sales in 2003 were 95,000, and by 2006 they had grown to 162,000.”

The performance of the premium 4x4 segment (a sector which includes the BMW X5, Range Rover Sport and Mercedes ML-class) was also surprisingly strong. This segment came in second place, with an average retained value of 46.5 per cent. However, the age of the cars in the study means they pre-date the heavy discounting on new cars experienced by this sector in the past 12 months.

Superminis (eg Ford Fiesta) also performed well, coming in third place with an average 44.5 per cent retained value. “Small and supermini cars are the residual value kings of the used car market, a position they are unlikely to relinquish in the foreseeable future,” said Rushmore. “Even when we finally recover from the current recession, their eco-friendly credentials are likely to keep demand and residual values high.”

The conventional luxury saloon (eg Mercedes S Class and BMW 7-series) and the large famiily car (eg Ford Mondeo) segments fared worst, holding on to just 35 per cent and 34.5 per cent of their new values respectively.

Matt Rigby

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