Buying a new car will never be regarded as the shrewdest financial investment one can make unless, that is, one can secure a rare Ferrari or Bugatti for which there are more wannabe buyers than cars built. But the vast majority of car buyers must face the fact that almost any car they buy will lose around half of its value within three years.
However, for those motorists who find such a loss hard to justify but who still yearn for a stylish new car, there may be an answer.
A new survey has found that convertibles have some of the best performing residuals in Ireland, and retain up to 58 per cent of their showroom price after three years.
However, while the residual values of each of the four categories of convertible - the supermini, small/medium, executive and luxury - outperform their saloon and hatchback equivalents over three years, smaller convertibles devalue quicker over the first and second years. This is a unique trend that is the reverse of the usual residual value pattern that sees higher value luxury cars losing more of their value in the short term.
This suggests that for those considering buying a small convertible such as a Peugeot 206CC or a medium-sized model such as a Renault Megane Cabrio, should keep the vehicle for a least three years to reduce the impact of their car's falling value.
Sales of convertible cars have grown in recent years, especially since the emergence of folding hardtop convertibles, which offer the security of a metal roof along with the advantage of open top motoring when the weather allows.
According to figures from the Society of the Irish Motor Industry, sales of convertibles have risen rapidly since 1997, when just 311 were sold. Last year a record 2,500 convertibles left the showrooms, although figures suggest that there may be a drop this year, as sales return to 2004 levels when 2,000 convertibles and cabriolets were registered.
The GE Money Used Car Index found that all convertibles, whether soft-top like the Audi A4 or BMW 6 Series, or folding hardtops like the dinky Nissan Micra CC or the Peugeot 307CC, retained between 1 and 6 per cent more of their value after three years compared to a similarly sized saloon.
The largest gap was in the luxury sector, where a new convertible that costs €130,000 now, would be worth €70,000 or 54 per cent of its initial cost in three years. This compares favourably with a similar sized luxury saloon, which costs €105,000 now, but will be worth just €50,500 or 48 per cent of its initial cost in three years.
Unsurprisingly, the survey found that looks play an important part in determining how well a convertible will hold its value.
According to Rosie Dunne, head of marketing at GE Money, looks are one of the key factors in the buyer's decision to purchase a convertible, and it is probably the most important factor in resale values. "The most desirable models can hold up to 85 per cent of their value after year one, and over 60 per cent after three years," she says.
This is due to the convertible's desirability, which does not seem to diminish as quickly with age as their saloon counterparts. Even compact convertibles from mainstream marques like Opel also perform well. Even though these models cost considerably more than their saloon or hatchback siblings - about €7,000 in the case of an Astra Twin Top compared to an Astra Sport Hatch - their stronger residual values will ensure that the long-term costs may not be that different.
While it has been the case that it was only the prestige manufacturers like BMW, Audi and Saab which dominated the cabriolet market, mainstream manufacturers have enjoyed an increasing slice of the convertible market with a new breed of affordable folding hardtops fitted to compact and mini cars.
There are 13 convertibles (either hard or soft top) now on the Irish market, which range in cost from around €20,000 to almost €150,000. This, says GE Money, is in line with other niche car segments and reflects the consumer's desire to be seen as individual, even though what's underneath is almost identical to the standard saloon.
For those considering buying a second-hand cabriolet, now is the time. As the summer draws to a close, the value of a soft-top should fall slightly. However, this is not proving the case with hardtop convertibles, which are less affected by the season.
For those considering buying new, according to Rosie Dunne, there seems little financial down-side to selecting a convertible over the equivalent saloon, except at the supermini entry level. "It reinforces the popularity of niche segments. If you're going to spend €100,000, buy something unique such as a 4x4 or a convertible, it could save you €1000s over the long-run," she adds. "Convertibles have a hell of a lot more street cred and still make financial sense."
The convertible market can be broken down as follows:
Super mini segment: Mini Cabrio, Nissan Micra C+C and peugeot 206CC Small/medium segment: Renault Megane Cabriolet and Peugeot 307CC Executive: Audi A4, BMW 3-Series, Mercedes CLK, Saab 9-3
Luxury: BMW 6-Series, Jaguar XK8, Mercedes SL Class