DEPRECIATION:
THE SILENT ENEMY

The first thing you never learn at school is that a new car loses on average 15 to 25% of its value in the first year alone. Not after five years. The moment you leave the dealership.

On a €35,000 vehicle — the average price of a new car in France in 2024 — that represents between €5,250 and €8,750 lost in twelve months. Without a single accident. Without even having driven more than a few thousand kilometres.

58%
of value lost over 5 years A vehicle bought new for €35,000 is worth on average €14,700 after five years. Depreciation is the most underestimated cost of car ownership.

This phenomenon affects every category, but premium vehicles are particularly hard hit. The Audi A3, BMW 1 Series or Mercedes A-Class lose more value in absolute terms than a city car — even if their depreciation percentage is sometimes comparable.

Depreciation of a €35,000 vehicle — residual value by year
Remaining value
Cumulative loss
Year 1
€27,300
− €7,700
Year 2
€22,750
− €12,250
Year 3
€18,900
− €16,100
Year 4
€15,400
− €19,600
Year 5
€12,600
− €22,400
"Every month you spend paying off your car loan, you're paying for an asset worth less than it was the month before. That's the definition of a bad investment."

THE REAL COST:
WHAT WE FORGET TO COUNT

When people talk about the "cost of a car", most cite their monthly loan payment. That's a classic mistake. The real cost includes a set of invisible charges that quietly accumulate every month.

Compared annual cost — €25,000 compact vehicle
Expense Buying (5-year loan) Occasional MD rental
Monthly payment / direct cost €4,800 / year Based on actual use
Fully comprehensive insurance €1,200 – 1,800 Included
Maintenance & servicing €800 – 1,500 Included
MOT / roadworthiness test €80 – 120 Not applicable
Annual depreciation €3,500 – 6,000 €0
Tyres €300 – 600 Inclus
Tax / sticker / parking €400 – 900 Variable
Unexpected repairs €500 – 2,000 €0
Estimated total / year ≈ €11,580 – 17,720 Only what you use

These figures aren't alarmist estimates — they match the average data observed in France for a household owning a mid-range vehicle. The reality is that an owner often pays between €800 and €1,500 a month to drive a car that's losing value.

THE 4 MYTHS
OF "BUYING IS BETTER"

FALSE
"Once the loan is paid off, the car is mine, so I have something."
Yes, but exactly what? A vehicle that has lost 60% of its value, is 5 years older, and whose maintenance costs will rise significantly. What you "own" at the end of the loan is worth a fraction of what you paid — and it will cost you more and more to keep on the road.
FALSE
"Renting is throwing money out the window."
That phrase applies word for word to car depreciation. Buying a new car and reselling it five years later literally "throws away" an average of €20,000 for nothing in return. Renting means paying for a service you consume — exactly like a hotel, a gym, or Netflix.
PARTLY TRUE
"With my own car, I drive whenever I want, no constraints."
That's true for intensive daily use — if you drive more than 25,000 km/year, ownership does become competitive. But for urban profiles or occasional use, renting gives you access to a vehicle suited to each need: city car during the week, SUV for the weekend, sports car for a special occasion.
FALSE
"A car loan is wealth I'm building."
Wealth is what gains value over time. A car is by definition a depreciating asset — it cannot build wealth. The same monthly payment invested in property funds, life insurance, or a savings account produces a real return. A car loan, on the other hand, produces a guaranteed loss.

WHO REALLY
BENEFITS FROM RENTING?

The honest answer: not everyone. The occasional-rental model is particularly well suited to specific profiles. Here are the cases where the numbers clearly tip in its favour.

Ideal for renting
The urban dweller with variable use
You live in the city and mainly use a car on weekends. Renting occasionally costs 2 to 4× less than owning, insurance and maintenance included.
Ideal for renting
The enthusiast who wants variety
You don't want to be limited to a single vehicle. Renting gives you access to several models as the mood strikes: Golf GTI this weekend, RS3 for the holidays.
Ideal for renting
Access to premium without capital
An RS3 at €349/day gives you access to a €67,000 new car with no down payment, no loan, no depreciation. The premium experience, democratised.
Buying makes more sense
The heavy daily driver
If you exceed 25,000 km/year in regular professional use, ownership or long-term leasing becomes economically more logical.

THE FINANCIAL BALANCE
OVER 5 YEARS

Let's take a concrete example: you need a vehicle every other weekend and a few weeks of holidays per year — around 35 rental days a year. Here's what the two options look like over five years.

5-year simulation — Sporty compact vehicle
Scenario Buying new (loan) MD rental (35 days/year)
Direct cost (loan or rental) €24,000 €17,500
5-year insurance €7,500 Incluse
Maintenance & repairs €5,000 Inclus
Cumulative depreciation €20,300 0 €
Tyres & unforeseen costs €3,200 €0
Real total cost ≈ €60,000 ≈ €17,500
Buying — €60,000
Renting — €17,500
− €60,000
− €17,500
42K€
In potential savings over 5 years For 35 days of use a year, renting rather than buying can represent over €42,000 in savings over five years — a significant property down payment, or simply more financial freedom.
"The cheapest car you can own is the one you don't own." — A core principle of personal financial planning
Our conclusion
The numbers don't lie. But they need to be read in full.

Buying a car remains relevant for intensive, daily-use profiles. But for a large majority of French drivers — city dwellers, mixed use, enthusiasts who want variety — occasional rental is financially more advantageous.


At MD Location, we're not trying to replace your car. We offer a quality alternative for the moments when you want to drive better, without the constraints of ownership: no loan, no depreciation, no mechanical bad surprises. Just the car you choose, when you need it.

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