Tuesday, February 19, 2019

Audis & Depreciation: A Simple Guide



When buying a new or used Audi, there are numerous factors you will need to consider. You’ll have to think about the way the car drives, the insurance, and whether the car is suitable for your needs - all of which are relatively standard. However, it’s also important to consider another factor: depreciation.

What is depreciation?

Depreciation is an issue that impacts all makes of cars. The simple premise is that the moment a car becomes “used”, its value dips. So if you buy a vehicle for $40,000, the moment it transforms from a showroom vehicle to an actual, driven vehicle, the value begins to drop and will continue to do so for the car’s lifespan. If that vehicle depreciates quickly, you could find the value drops to around $30,000 within a year - but there is a considerable amount of variance in how quickly a car depreciates, as we will soon discover.

With the occasional exception of vehicles that become “classics”, or are rare to begin with, all Audis will never be more valuable than they are when sitting in the showroom. The moment they hit the road, their value begins to decline.

Why is depreciation such an issue?

When you purchase a new or used Audi, you’re making a significant financial investment. Unless you plan to drive your Audi until it is no longer roadworthy - which is rare - then it’s important to consider the potential return on investment you may be able to achieve when it comes to selling the vehicle at a later point.

It is important to note that considering depreciation is an essential factor in all circumstances; whether you’re buying a new car straight from the showroom, or are planning on finding a used car in order to keep the price more manageable. Often, depreciation is seen as an issue only for those buying new cars, but depreciation ultimately influences the cost of any Audi regardless of its age. In fact, it could even be argued that those looking to buy used cars are even more influenced by those seeking to buy new, as depreciation will impact both their buying and their eventual future sale price.

Is there any way to prevent depreciation?

Unfortunately not. Even if you keep your car in the best possible condition, the Audi you buy will depreciate. It’s a simple fact of use; the more time a car spends on the road, the more it is liable to experience wear and tear, which subsequently reduces the value of the vehicle. While depreciation can be somewhat mitigated by keeping your car in good condition, it’s impossible to halt depreciation altogether. If two identical models are bought at the same time and one is maintained well while the other is not, then the well-maintained vehicle will always be more valuable.

How do Audi compare to other brands in terms of depreciation?

Extremely well! A UK survey found that after 35,700 miles, Audis are second only to Mini in terms of retaining their original value.



Do some Audi models depreciate less than others?

Here’s where things get interesting: yes. The rate a vehicle depreciates is based on a number of factors; the mechanical concerns over time spent on the road are the biggest factor, but other elements such as customer preferences and how popular the vehicle is can influence depreciation too. This means that different Audi models will depreciate at different rates.

Which Audis keep their value the best?

While we cannot list the depreciation rate for every Audi ever produced, (we’d need a couple of novel-length pages to do so!) we can highlight a few models that, according to the statistics, are standing up well when it comes to depreciation.

Before we dig into the number, we first need to highlight how we’re measuring depreciation with this example:
  • A new Audi is sold for $150,000.
  • A year after its release, the same car has a value of $100,000.This means that to buy a one-year-old car, you’d have to pay 66.6% of the price the vehicle cost as-new. By measuring depreciation in percentage of the original value, we can see how clearly the prices are dropping.
  • However, given that most vehicles will experience the sharpest depreciation in their first year, we’ll also be including the depreciation rates for years two and three, which is again measured in percentage of the original sale price.
  • So, if the example car above (which cost $150,000 as new) is worth $75,000 after three years, it has experienced 50% depreciation over that time. By providing the three-year figures, we can establish an overall pattern of depreciation.

So, without further ado, here are two Audi models that are particularly noteworthy when it comes to retaining their value:

  • Audi SQ7 Quattro Tip Auto - 78.9% in the first year after, then 60.2% after three years.
  • Audi RS3 Quattro S Tronic - 76.0% in the first year, then 61.2% in the third year.

Given that, as we have mentioned above, Audis seem to hold their value well anyway, opting for either of the models above can lock in those benefits.

What about depreciation after three years?


After the three year point, you can generally expect a car to continue losing its value by roughly 10% every year. By opting for one of the models that has depreciated the least in the first three years, this continual and somewhat steadier rate of depreciation is more manageable as you’re starting from a higher price. For example, if you bought a model with a 50% depreciation value, a further 10% loss after three years would mean your total depreciation was 20%. However, if you opt for a car with a higher three-year depreciation of 60%, then a further three years of use would result only in a 30% total depreciation - so the resale price would still be in your favor.

In conclusion


Depreciation is a serious concern for all car owners, so when looking to buy a new or used Audi, it may be best to opt for a model that has thus far shown it can retain its value for many years to come.

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