As the launch of the 57 number plates draws closer, many British consumers could be heading to their chosen lender to get a car loan ahead of the purchase of a new car.

However, according to research from price comparison and switching service uSwitch, new car depreciation across Britain’s top ten best selling cars could see the price of the vehicle drop radically in the first year.

According to uSwitch, a collective 4.8 billion pounds will be wiped off the value of the top ten most popular cars after the first year following purchase due to depreciation. This works out at a loss of 16 pounds 37p per day based on the average depreciation in the first year, the website suggests, implying that a car loan to fund the purchase of a brand new vehicle may not be the best way to utilise the borrowed funds.

The Ford Focus was the nation’s most popular car in 2006, according to figures from the Society of Motor Manufacturers and Traders (SMMT) quoted by uSwitch. Some 137,694 Focuses were purchased in 2006 yet the Ford Focus Style 1.8, which retails at £14,622 new in today’s market, will lose 48 per cent of its value after the first year. This percentage loss - which translates to a little more than £7,000 - is nearly matched by the second and tenth most popular cars, the Vauxhall Astra Club (115) 1.6 and Vauxhall Zafira Active 1.8 Design, which both depreciate by 46 per cent after year one.

However, all the cars continue to lose value rapidly in further years. In the second 12 months, the value of the aforementioned Ford Focus could fall by another 1,399 pounds and after four years it will have depreciated by 10,232 pounds in total, a full 70 per cent off the initial retail price, something that does not necessarily represent good value use of a car loan.

“Buying a brand new car is an exciting moment, but in reality it is not as simple as just driving off the forecourt and into the sunset,” said Aron Thompson, head of insurance at uSwitch. “For most, a one-year-old car represents far better value as this is the period when the bulk of depreciation takes place. The amount of money lost on a car in the first year does vary from one brand to another but the Ford Focus clearly takes the number one spot with almost half of the car’s value disappearing after just 12 months.”

Moneyfacts.co.uk, another online comparison site, this week stressed the need to find the right loan package to match a car purchase, with the same amount of time invested in this to find the cheapest loan. With the website looking at both three-year and five-year loan options, if a Ford Focus buyer was to take the latter, they could still be paying their loan off on a car that is worth 70 per cent less than it was when they started their repayments.

Once a new car is purchased, insurance is one of the added costs for motorists and it was suggested earlier this year by moneysupermarket.com that choosing green car insurance cover could see premiums pushed up by as much as 44 per cent.

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