Family cars are the worst for depreciation, with some losing more than 60 per cent of their value after three years, according to a new report.

Top of the value market is the Land Rover Freelander which retains almost 80 per cent of its value after three years, the report form the Alliance & Leicester bank showed.

Other cars good at retaining value include the Volvo S40/V40 Series, the Volkswagen Lupo, the Peugeot 206 and the Ford Focus.

The report also showed that city cars keep their value best after three years, while the residual value of a a three-year-old family car is only 39.8 per cent, compared with 47.4 per cent in a similar survey last year.