ON AVERAGE YOUR new car will depreciate by one-third after three years. Currently, in Ireland, a car loses about 35 per cent of its original market value after three years, according to Motorcheck.ie.
However, at the moment the Irish market is in an anomalous period as the values of three-year old cars are actually increasing slightly. So a three-year old car bought this year will cost more, on average, than the same model of three-year old car bought last year.
Used car prices have steadily increased over the past three years as demand has outstripped supply. During the financial crisis fewer people were purchasing new cars in Ireland, which several years on has resulted in a limited stock of used cars on the forecourts.
To take a closer look at these used car trends, we’ve looked at the average prices of petrol and diesel Volkswagen Golfs from both private sellers and dealers to see how the values have changed over the last five years. We split the cars into three categories; cars 0-3 years old, 4-6 years old and 7-10 years old.
Here’s what we found:
In 2012, the average price of a 0-3 year old petrol Golf bought from a dealer was around €18,000 (about €1,000 less than a diesel Golf). A petrol Golf today is worth €23,274 on average – an increase of roughly 29.3 per cent.
Prices on diesels have increased too. In 2012 a 0-3 year old diesel Golf was worth €19,184; today it is €21,082. That’s a 9.89 per cent increase. (Since 2013, petrol Golfs have been worth, on average, more than diesel Golfs.)
A similar pattern plays out with cars from private sellers. If we look at 0-3 year old petrol Golfs advertised privately, the average price in 2012 was €13,210 but in 2017 that has jumped to €19,677. That’s a massive 48.96 per cent increase.
For comparison, the overall CPI (Consumer Price Index) inflation rate has never been more than 1.22% in the last five years – and in fact was negative in 2014.
The rising price trend continues for 4-6 year old petrol Golfs advertised by dealers. In 2012 the average price was €9,232 and this year it is just over €14,000 – a massive 52.44 per cent increase.
In 2012, diesel options were about €800 more expensive than petrol versions but today the diesels are worth less and have an average price of €13,241, an increase of about 32.41 per cent. Again, the same pattern is replicated with privately sold cars.
Huge jumps in prices have also registered on 7-to-10-year-old models. In 2012, a 7-10 year old petrol Golf from a dealer was worth on average €4,418 and today a 7-10 year old petrol Golf is worth on average €6,710. This is an increase of 51.87 per cent.
The diesel equivalent has gone from about €5,000 in 2012 to about €8,100 today. That’s a huge increase of 61.99 per cent. The same trends can be seen in the prices of private sellers.
This data shows that the biggest change in prices from 2012 to today is in the 7-10 year old category, petrol and diesel. This would make sense as there are fewer 2009 onwards Golfs on the road today due to the financial crash in 2008. So this jump in price could just be due to supply and demand.
The next biggest jump was in 4-6 year old petrol models followed by 0-3 year old petrol models. If this is a supply and demand issue, could this be an indicator that the tide is turning and we are seeing a petrol resurgence?
If you are looking to buy a used Golf there should be some more stock becoming available as new car sales are increasing and hopefully with more stock will come lower prices.
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