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Upgrades give better residual value

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Used-car valuation experts have suggested that choosing a car with higher specifications provides a better residual value years later, compared with loading a more basic model with additional features.

According to CAP, the added options only retain up to 20% of their original cost while a higher spec regular model can see around 90% of the extra cost retained.

The total cost of add-ons like cruise control, rear parking sensors, self-dipping rear view mirror, automatic air conditioning, multi-function steering wheel, interior lights pack and different style alloy wheels to a BMW 318d ES model was £1,520 three years ago.

In today's market, the features only retain about £300, or 20%, of their value after being used for 60, 000 miles.

While the upgraded SE variant of the car, which cost £1,030 extra than the original, has retained £925 - or 90% - of the additional expenditure today, at 60,000 miles.

CAP's Mark Norman says that it is essential for buyers to understand the true value of additional features in order to make intelligent vehicle purchases.

Car users should also note that cars with higher specifications will generally have higher car insurance premiums.

© Press Association 2011