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Spec: the great divide between new and used cars

Never are the differences between new and used car buyers more apparent than when it comes to spec. Referring to the corporate sector, because of its dominance in the new car market, enhanced specification is often a badge of success. This is why many higher spec cars show their differences on the outside.

They don't make the car any more pleasant or comfortable to drive but alloys, extra chrome and colour-coded body parts make the driver's position in the corporate pecking order clear at 100 paces.

Look inside the car and the enhancements are more 'touchy feely', sophisticated or high tech. So, what do they cost and are they worth having in terms of value retention?

Let us look at Mondeo and Vectra as the classic company cars.

The price difference between a Mondeo 2.0 LX and the 2.0 Ghia X is £5,000. On Vectra the price difference between the 2.0 LS (aircon) and a 2.0 CDX with leather is similar. The additional £5,000 is spent on alloy wheels, sunroof, as well as aircon, more airbags, electric rear windows, heated wing mirrors, leather and a CD auto changer. Possibly even electric seats. But what are those luxuries worth on a used car?

To answer this we need to understand what the typical used car buyer is looking for. The answer is usually a car which appears reasonable value to buy and does not cost the earth to run.

For many used car buyers, those 'executive' creature comforts can be perceived as a disadvantage - even a liability. We have all heard people say 'that's just something else to go wrong'.

How much are customers going to pay to sit on leather, rather than cloth, or adjust a seat or mirror occasionally with a button? The truth is not much, compared with cost new. On a typical used car our list of extras will do well to retain 20% of their new value - say about £1,000.

It is not that the customer does not want these creature comforts but they feel less and less inclined to pay for features they increasingly expect. Some extras do pay their way better than others, for example, aircon. But money spent on a stereo system is unlikely to pay off in the long term.

Generally the key to viewing options is to ask whether or not the feature is likely to add significantly to the driver's day-to-day happiness. Those features which will - such as an excellent colour, roof and aircon - are likely to enjoy best value retention. The rest should simply be enjoyed for what they are - inessential but nice - and valued accordingly.

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