How to Calculate Depreciation
How to Calculate Depreciation
Author
Discussion

bosshog

Original Poster:

1,799 posts

306 months

Sunday 13th June 2010
quotequote all
Ok,

how the heck can I work this out? Basically I'm uming and aring between various very different cars for my 90 mile commute every day.

I'm looking at various cars at vaious price ranges petrol vs durv etc. Thing is I trying to work out total cost of ownership over a couple of year maybe 3.

So can we take as an example a couple of cars and work out what they would be worth in 3 years? I don't have a clue how to really calculate this.. perhaps look at the equivalent older model and see how they depreciated?

couple of examples:
335d
350Z

thanks for any input

Bodo

12,604 posts

296 months

Sunday 13th June 2010
quotequote all
If the model exists for some years, you could look what a 3yr old used car is advertised for - deduct 15% for what the private seller actually gets.

Alternatively, have a look at what leasing companies anticipate/guarantee, what the remaining value will be after 3 years.

Dave^

7,897 posts

283 months

Sunday 13th June 2010
quotequote all
Doesn't Evo/Car have projected rates in the back of their mags?

Shaw Tarse

31,897 posts

233 months

Sunday 13th June 2010
quotequote all
Dave^ said:
Doesn't Evo/Car have projected rates in the back of their mags?
I thought most car mags did the projected depreciation thing?

Dave^

7,897 posts

283 months

Sunday 13th June 2010
quotequote all
Shaw Tarse said:
Dave^ said:
Doesn't Evo/Car have projected rates in the back of their mags?
I thought most car mags did the projected depreciation thing?
Just looked at Evo and TG Mags... Apparently not...

I know one of them does, don't have Car to hand though...

Dave^

7,897 posts

283 months

Sunday 13th June 2010
quotequote all
What Car? has a calculator on their site...


http://www.whatcar.com/car-depreciation-calculator...

bosshog

Original Poster:

1,799 posts

306 months

Sunday 13th June 2010
quotequote all
Dave^ said:
What Car? has a calculator on their site...


http://www.whatcar.com/car-depreciation-calculator...
only works on new cars - thanks though!

Dave^

7,897 posts

283 months

Sunday 13th June 2010
quotequote all
bosshog said:
Dave^ said:
What Car? has a calculator on their site...


http://www.whatcar.com/car-depreciation-calculator...
only works on new cars - thanks though!
Aye, and only for the first 4 years...

I guess after that, there are too many variables...

BOR

5,149 posts

285 months

Sunday 13th June 2010
quotequote all
I assume 30% for the first year, then 10% each subsequent year as a broad rule-of-thumb.

gizlaroc

17,251 posts

254 months

Sunday 13th June 2010
quotequote all
BOR said:
I assume 30% for the first year, then 10% each subsequent year as a broad rule-of-thumb.
Same here, that's why buying something at 12 months after the big drop always works out cheapest, as long as you can afford the initial price of course.
Sometimes works out cheaper to finance the difference between a 4 year and 1 year old car as well if the newer version has warranty, sometimes for more efficient etc. etc.

raf_gti

4,257 posts

236 months

Sunday 13th June 2010
quotequote all
Surely it depends if you are planning on owning it outright or accept that fact that to 'own' a nice car you will have to pay £xxx per month towards it.

FWIW I know BMW do PCP finance on used cars up to 3 years old. I had a quote for a 120d M-Sport for £2.5k deposit and £249 per month on a car that was £15k. In terms of a monthly payment/initial outlay that seems like decent value.

Wacky Racer

41,363 posts

277 months

Sunday 13th June 2010
quotequote all
As a very general rule, most cars will be worth around half the new list price after three years.

(Yes I know there are exceptions)

whoami

13,201 posts

270 months

Sunday 13th June 2010
quotequote all
Dave^ said:
bosshog said:
Dave^ said:
What Car? has a calculator on their site...


http://www.whatcar.com/car-depreciation-calculator...
only works on new cars - thanks though!
Aye, and only for the first 4 years...

I guess after that, there are too many variables...
It's also total and utter shyte.

Shaw Tarse

31,897 posts

233 months

Sunday 13th June 2010
quotequote all
whoami said:
Dave^ said:
bosshog said:
Dave^ said:
What Car? has a calculator on their site...


http://www.whatcar.com/car-depreciation-calculator...
only works on new cars - thanks though!
Aye, and only for the first 4 years...
I guess after that, there are too many variables...
It's also total and utter shyte.
as was my post about car mags giving figures for depreciation! Ah that's getmecoat mine thanks!

Welshbeef

49,633 posts

228 months

Sunday 13th June 2010
quotequote all
I've always worked on the reducing balance basis not straight line and I always assume 23% loss per year

Example car bought for 10k after 1 year it will be worth 7.7k ie it retains 77% and year 2 it's value will be 77% of 7.7k and so on. If you buy a brand new car I'd add 17.5% on top of the 23% thereafter back to 23%

The rule of thumb of 50% is very good though.