DE­PRE­CI­A­TION DE­BUNKED

The cars to buy, and avoid, if you pock­eyt­care about your hip

Wheels (Australia) - - Contents - JAMES WHITBOURN

Want to know how much your new car re­ally costs?

THE PRICES listed in Show­room from page 136 are what you’ll need to out­lay to park a given model in your garage, but they are not the cost of owning that car, as our an­nual Gold Star Value awards re­veal start­ing on page 104.

Run­ning costs such as fuel, in­sur­ance and ser­vic­ing con­trib­ute sig­nif­i­cantly to the cost of own­er­ship. How­ever for most mod­els the cost of de­pre­ci­a­tion by far out­weighs these ex­penses.

Spoiler alert: the Kia Pi­canto S won the Gold Star Value City Cars cat­e­gory and, with a top score of 93.3 out of 100, it could be con­sid­ered the over­all Gold Star Value Awards win­ner too.

The $14,190 Kia is cheaper to own than the vast ma­jor­ity of new cars, and its 46 per­cent Glass’s three-year re­sale is pretty good by class stan­dards. Yes, los­ing more than half its value is con­sid­ered a de­cent re­sult as de­pre­ci­a­tion goes.

This means the Pi­canto will lose 54 per­cent of its value in the first three years, or around $7663. In the same time, the av­er­age Aus­tralian driver will spend about $2243 fuelling the Kia, $1860 on in­sur­ance, and $969 on three ser­vices, ac­cord­ing to Kia’s capped­price scheme. That’s $5072 in to­tal – a fig­ure that the de­pre­ci­a­tion over the same pe­riod tops by around 50 per­cent. So the real cost of owning the Kia for the first three years isn’t $14,190, it’s $12,734, or $4245 per year (with­out fac­tor­ing in in­ci­den­tals, such as tyre wear) which al­most makes us want to go and buy an Opal/myki card…

This is the cost for some­one who has bought the car out­right. If there’s a car loan, any nond­e­ductible in­ter­est pay­ments should be added too, which can in­crease over­all cost con­sid­er­ably.

In a pop­u­lar medium SUV such as 2017’s $45K cat­e­gory-win­ning Kia Sportage GT Line, the costs of fuel, in­sur­ance and ser­vic­ing rise to about $7000 over three years, but de­pre­ci­a­tion based on the Kia’s 53 per­cent three-year re­sale fig­ure sky­rock­ets to $21,615.30. The to­tal three-year own­er­ship cost of the Kia is about $30K. And re­mem­ber, this is for a rea­son­ably priced fam­ily wagon that our anal­y­sis in­di­cates is the best in its class in terms of min­imis­ing your cost of own­er­ship. We hate to say it, but a Go­get is start­ing to sound ideal.

The panels to the right pro­vide the best- and worst-case sce­nar­ios of all the cars put through our Gold Star Value anal­y­sis, in terms of re­sale and the dol­lar cost of de­pre­ci­a­tion. In the first three years, the best of them will shed roughly the value of a good, used small car, while the worst will burn the equiv­a­lent of a house de­posit… in Syd­ney.

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