Michael McAleer reports on GE Money's analysis of the used coupé market
Latest figures suggest coupé drivers are smiling not just because of their eye-catching cars. Wouldn't you smile if your car held 90 per cent of its value after one year.
The general used-car market is holding up well, given rising new car sales and good deals available on the low mileage hire-drive market. However, the latest analysis of the coupé market by GE Money in its car price index shows that appearance is the main factor in used-car value.
Cars with street cool can hold on to up to 90 per cent of value after one year and an impressive 70 per cent after three years, according to Eoin Lynam, marketing director of GE Money.
"On average, coupés hold a high residual value," he says. "They may have a higher starting price, but depreciation may be the same as it is for the equivalent saloon and hatch."
In the 10 years since 1995 the number of makers offering coupés is up from 16 to 23, almost 50 per cent, according to GE Money figures gathered last month. Cabriolet/convertibles are up from six to 13.
All this reflects the consumers' desire to be have something a little different from the mainstream three-box saloon format, even if what's under the sleek lines is identical to the saloon.
Prices in this area vary extravagantly, from €20,000 to €200,000. Despite this, percentage residual values are quite close in each sector. In the five-year bracket, the similarity is remarkable given that the average price is from under €10,000 up to almost €50,000.
The figures must be taken with qualifiers. Some new cars came to market in 2002, while existing models got a significant facelift - this may distort some figures but not enough to cause any major inconsistency.
Best-selling models are at introductory engine levels or just above it, where performance and specification are seen as more than adequate. Standard trim, however, is often upgraded on coupés, to include full leather, special alloys, sat- navigation, inbuilt phone etc - and the price can rise by between €10,000 and €20,000.
GE says that the fact that many coupés are optioned-up detracts from apparent residual values.
As in all market sectors, there are winners and losers among coupés, cabriolets and convertibles. Some retain exceptional residuals, while others can lose heavily. Coming from a higher price the spread of values is quite big between the top- and bottom-selling models.
In the small to medium coupé sector, with cars such as the Hyundai Coupe, new prices range up to €35,000, with most new sales from €23,000 to €30,000. These cars are often bought by women who like to the coupé image, but have no interest in splashing out on high-powered V8 models.
They are similarly priced to a family saloon and generally less practical. Yet they still make absolute financial sense when you weigh things up. Even though these cars seem to cost considerably more than superminis and hatch-backs, the running or finance costs may not be that different.
In the medium-sized sector, with cars such as the Mercedes CLK and the BMW 3-Series Coupes, new prices range from €35,000 to €80,000, with most new sales from €45,000 to €60,000. Buyers are characterised as "corporate car-park competitors" or more derogatively "male mid-life crisis" types. Yet again, resale values are way ahead of their saloon cousins.
There has also been a growth in the sales of coupé diesels to these customers. These cars have diesel's new-found power in sleek body shapes.
At the upper end, with the likes of the Jaguar XJ and BMW 6-Series, new prices range from €80,000 to well over €100,000. Most new sales are from €120,000 to €150,000. If you've made it to this sector, your payments will look like first-time buyers' mortgages - €1,500 plus a month is the starting point.
In this section, unlike luxury saloons, percentage residual values are significantly better - an average of 40 per cent (compared to 30 per cent) after five years, according to the GE Money figures. In contrast to saloons, coupé value retention is quite close in each sector despite the price spread. In the five-year bracket the similarity is quite remarkable taken that the average price is from under €10,000 up to almost €50,000.
Then there's the soft-top brigade. People who splash out on convertibles usually spoil themselves with lots of extra equipment. Thus used coupé convertibles prices often appear much higher, but they reflect this extra investment.
Residuals here used to suffer from fading rear windows and questionable roof quality. Now, with ever better roof quality, there is a growing demand all year round, but premium prices tend to be paid when the sun is shining and the forecast is for more of the same.
Because of the limited numbers coming back to the market and the growing interest in quality models, prices tend to remain strong for these models. Quite a sizeable part but not all of the extra cost over similar coupés can be expected.
There seems little financial down-side to selecting a coupe over the equivalent saloon, says Lynam. "If you're going to spend €100,000, buy a 4x4 or coupé - it could save you thousands over the standard saloon when you resell. Coupés have a hell of a lot more street-cred and still make financial sense. Coupé convertibles are sitting in garage forecourts now, but will quick disappear once we get our first sunny weekend."
Coupés represents an image choice without the extremes of a sports-car, he says. "The index has found that, between the relatively strong residual values and current low finance costs, there are plenty of reasons to upgrade that family saloon."