Depreciation can actually benefit the owner of an Audi if it is leveraged correctly.
Let’s look at how the models within the Audi boutique compare. Then we explain a bit about the characteristics that impact the depreciation of a car.
Audi models compared
Car values of the top 13 car brands were compared to see which models would hold their value best at the beginning of 2017.
These numbers indicate how Audi has held its price second only to Mini and depreciated at 47.33% at a mileage of 34,700 miles.
|Auto Brands||Depreciation around 35,000 miles|
Figure 1 Depreciation in 2017 with mileage over 34,700 miles
The research sourced data from hundreds of online used car marketplaces as well as traditional dealers in five of the UK’s biggest cities.
It found that cars in the UK ranked second last of the world’s leading economies when it came to depreciation – beating only New Zealand – with an average of 51.9% lost from cars sold here after 34,700 miles.
The study also found that China is the most expensive place to buy a used car, with average prices decreasing by just 29.42% after that mileage. Turkey, Portugal, and Finland finished behind it with 29.5% to 34.31% loss from their average used motors respectively.
Of course, Britain’s Brexit decision might impact these data should new car prices increase. Experts feel that an increase in used values would occur as fewer people opt for a new car and increase demand in the second-hand market.
Depreciation hacks to know
We call it the depreciation hack. It assumes the car is purchased after a period of time as a previously owned vehicle, and then sold before reaching a certain age.
The hack is all about minimizing loss as the market value of the vehicle reduces. All you need to do is buy right.
Other aspects which contribute toward depreciation
There are a few golden rules to optimize the depreciation hack. You will want to buy the best and then resell the vehicle at the right time.
- Don’t buy new
- New vehicles devalue as soon as they drive off the floor
- Previously owned vehicles have already devalued
- Depreciation slows at the sweet spot
- white is best
- lighter the better
- minimized mileage minimize depreciation
- Previous owners
- more owners – more depreciation
- accidents are bad
- records of being regularly maintained are good
- Warranty and service
- still got warranty left – encourages higher resale value
- Brand and model
- Fuel economy
- an early adopter of technology
- hybrids and e-mobility
- Size and cost
- Executive, Premium, Average, Small cars
- first three years with the higher cost cars depreciate the quickest
What’s the “sweet spot” to buy?
The data below shows that the sweet spot to buy an Audi is around the 3-year-old date.
|Year||% Decline (YOY)||% Decline||% Paid||% Left||Years Left||Net Used Value ®|
Year – The brand model year.
% Decline (YOY) – Year over Year price decline.
% Decline – Total percentage of decline.
% Paid – Percentage of the original price paid for that model year grouped by the same trim levels.
% Left – Percentage left of reliable years with relatively predictable costs of the vehicle.
Years Left – Current industry average of years remaining with predictable maintenance and repair costs.
Net Used Value ® a ranking & sorting index to help you find the model years with the most value.
Figure 3 Average Audi Depreciation
2016, 2017 & 2015 Audi model years are currently the best values to buy in 2019.
The year 2016 is highlighted in green to indicate it’s the absolute optimal purchase. On average, expect to pay only 57% of the original cost with 75% of the vehicle’s lifetime remaining for a 2016 Audi. That gives it a Net Used Value® score of 17.61 which factors in annual maintenance costs, price decline, reliable years left and available inventory.
We can consider the 2017 & 2015 model years as the next best to purchase.
Those currently have a generally low risk of any significant depreciation over the next several years.
Colors to go for
These colors are best when it comes to holding the value of your car. They apparently have the broadest appeal.
These colors are among the most popular shades for new cars and the ones most likely to generate strong second-hand prices.
Then there are the eight bad colors that hurt the resale value of your car. These are the less popular colors that just don’t help the car keep its value over the years.
A car can depreciate as much of $0.08 per mile.
So, obviously, the more you drive, the more you devalue your car. Most regular cars in the States run around 5,000 miles a year and up to 15,000 miles a year.
More owner’s – more depreciation
A single-owner car doesn’t always mean it’s been driven and maintained any better than a multi-owner car. Ultimately, what you need to be looking for are accurate maintenance records.
There is a better chance of establishing consistent maintenance and driving history if it has only been driven by a single owner previously.
If someone buys a new car and drives it for a decade, it’s likely that car received roughly the same level of care – and the same driving experience – throughout that time period.
With multiple owners, a car may have been subjected to various levels of care and a wide range of different driving styles, which may negatively affect its long-term durability.
A single owner would have bought the car from new and would be more likely to have the financial resources needed to do proper maintenance.
The condition of the car counts a lot.
Aside from being an indication of how well the owner has looked after the car, it will indicate the inherent condition of those aspects that aren’t obvious or visible.
Rock chips, and lack of basic maintenance, such as brakes and tires, will always account for price variation.
What warranties exist on the Audi
To ensure your warranty is valid, you simply need to service your Audi according to Audi recommendations and keep to any mileage limitation set.
Standard three-year warranty [Up to 60,000 miles] exist when purchasing new.
However, if purchasing a 3-year old model you may need to make a decision whether or not to purchase an extended guarantee.
The Audi extended warranty provides more comprehensive service and repairs than the manufacturer’s standard bumper-to-bumper and powertrain warranty.
Specifically, it covers mechanical repairs that include parts and labor up to 10 years or 120,000 miles.
The warranty specifically covers mechanical protection beyond the factory warranty. It does depend on the plan chosen, but you would receive genuine Audi parts and service. The model of Audi might limit the extent of the extended warranty, so check that before making the purchase.
There may be other exclusions that apply:
- Mechanical breakdowns covered by the vehicle’s manufacturer’s warranty
- Mechanical breakdowns caused by accident, collision, vandalism, or weather-related conditions
- Mechanical breakdowns caused by lack of maintenance or pre-existing conditions
The great things about the extended warranty from the Audi Vehicle Service Protection plan are its coverage of components and roadside assistance.
What we don’t like is that It doesn’t cover mechanical breakdowns related to accidents, vandalism, or weather-related conditions. It’s essentially up to the owner of the vehicle, and supposedly the age of the vehicle.
Brand, Fuel economy
Audi has always been known to adopt technology early.
This and the fact that Audi pursues sustainable and electric futures place them on the buyer’s preference list. As soon as a brand is sought after, be it for prestige or practicality, it will begin to hold its value compared with opposition brands.
Which Audi model depreciates the least
Here are the numbers for all models ranging from low to high.
The numbers are the depreciation numbers for 3-year old Audi models:
- RS4 Cabriolet: 16%
- A4 Cabriolet: 16%
- SQ7: 17%
- A2: 20%
- RSQ3: 21%
- RS6 Avant: 22%
- R8: 22%
- TT RS: 24%
- RS3: 24%
- RS4: 25%
- SQ5: 29%
- A6: 29%
- S1: 31%
- Q2: 32%
- A4 Allroad: 32%
- S3: 33%
- TTS: 34%
- Q3: 33%
- A1: 34%
- Q7: 36%
- TT: 37%
- S6 Avant: 41%
- RS5: 41%
- A3 Cabriolet: 42%
- S4 Avant: 43%
- S6 Saloon: 44%
- A6 Avant: 45%
- A4 Avant: 45%
- S5: 46%
- S4: 46%
- RS7: 47%
- A7: 47%
- A5: 47%
- A4: 47%
- Q5: 49%
- A5 cabriolet: 49%
- RS4 Avant: 50%
- S7: 53%
- A6 Saloon: 53%
- S8: 59%
- A8: 60%
- A6 Allroad: 64%
- A3: 67%
- RS6: 77%
- S4 Cabriolet: 85%
The end results
The sweet spot is the period after the vehicle’s first — and most significant — depreciation and the second steep depreciation, which comes around the fourth year.
This pattern is fairly consistent across all models.
Most manufacturers’ CPO programs provide excellent, well-kept used cars that have already had their biggest depreciation hit and come with extended factory warranties.
We can see that Audi isn’t necessarily the cheapest of cars, and doesn’t depreciate at the lowest rate. Even within the manufacturer’s own boutique, there is a span on the rate of depreciation, with little correlation to model or type.
The decision will come down to value for money rather than the depreciation rate.
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