How to calculate the depreciation of any car.

RED PASSION

Hey Guys & gals,

I would like to know how do i calculate the depreciation of my car (any car), up to now i check on donedeal/ carzone for cars with similar mileage and engine size etc and price around that. if i buy a diesel bmw 3 series 2.0L approx €29000 how much could i expect to sell it for in 3-4 yrs time, doing approx 10-13 thousand miles per year. ( so average mileage) :cool:

Have a 08 astra opc, 2.0L petrol turbo and what to know if i should sell it now or will the depreciation be small enough to hold onto it for two more yrs.

Cheers
Red Passion

dingding

RED PASSION wrote: »

Hey Guys & gals,

I would like to know how do i calculate the depreciation of my car (any car), up to now i check on donedeal/ carzone for cars with similar mileage and engine size etc and price around that. if i but a diesel bmw 3 series 2.0L approx €29000 what could i look to sell it for in 3-4 yrs time, doing approx 10-13 thousand miles per year.:cool:

Have a 08, 2.0L petrol turbo opc and what to now if i am best selling it now or will the depreciation be small enough to hold onto it for two more yrs.

Cheers
Red Passion

Half the price every 3 years.

Ie a car that cost 40,000 will be worth 20,000 after 3 years and 10,000 after 6.

RED PASSION

dingding wrote: »

Half the price every 3 years.

Ie a car that cost 40,000 will be worth 20,000 after 3 years and 10,000 after 6.

Thanks for that, good rule of thumb

colm_mcm

It's totally inaccurate though, that's probably it's biggest flaw

RED PASSION

colm_mcm wrote: »

It's totally inaccurate though, that's probably it's biggest flaw

Ooohh waste of time using it so then, suppose it never takes into account is the car regularly serviced, what type of mileage has it done per year etc.

Anan1

The only accurate way to predict the resale value of a car 3-4 years down the road is with a crystal ball. All that's certain is that the new BMW will depreciate massively more over the period than an 08 Astra.

RED PASSION

Anan1 wrote: »

The only accurate way to predict the resale value of a car 3-4 years down the road is with a crystal ball. All that's certain is that the new BMW will depreciate massively more over the period than an 08 Astra.

I understand what you are saying better to hold onto what i have than change my car for one with a different fuel type and performance level in depreciation terms anyway.

I thought a high performance petrol would lose more money than a diesel since nowadays with diesels there is a better market for them whereas a high end beast would rob most people to keep it on the road with tax, insurance and fuel been dearer. so i thought the diesel would sell for more (lose less depreciation wise) with that logic.

Anan1

The diesel would hold its value better than a petrol performance car of the same age and price. But the Astra's older, and worth less to start with. Even if it lost the same % per annum as the BMW, which it won't, that would still be a lot less money.

Pottler

Easiest way to calculate depreciation for ANY car is to buy it, drive it until it is time to move on, sell it, and then take the amount you got for it away from the amount you paid for it. Works almost every time. Great formula.

RED PASSION

Pottler wrote: »

Easiest way to calculate depreciation for ANY car is to buy it, drive it until it is time to move on, sell it, and then take the amount you got for it away from the amount you paid for it. Works almost every time. Great formula.

:P I think this formula is along known as 'learning the hard way'.

I sold a 98 polo a year ago for next to nothing to get rid of it, think i had it over-priced by a few hundred €'s before hand, as I got absolutely no calls, then dropped it by €400 and people were snapping my hand off for it even with no power steering. If this was a high value car to begin with, a few thousand euro in someone elses pocket and not mine would make a big difference to me.

i just want to know how to get a fair valuation for a car so i am not stung or ripping someone else off either.

sunnysoutheast

RED PASSION wrote: »

Hey Guys & gals,

I would like to know how do i calculate the depreciation of my car (any car), up to now i check on donedeal/ carzone for cars with similar mileage and engine size etc and price around that. if i buy a diesel bmw 3 series 2.0L approx €29000 how much could i sell it for in 3-4 yrs time, doing approx 10-13 thousand miles per year. ( so average mileage) :cool:

Have a 08 astra opc, 2.0L petrol turbo and what to know if i should sell it now or will the depreciation be small enough to hold onto it for two more yrs.

Cheers
Red Passion

Parkers and What Car provide a UK valuation estimation service, based on historic prices, although I believe both are considered somewhat optimistic you may be able to make some qualitative comparison with Irish prices. I don't know of a similar database for Ireland.

If you have a 2008 petrol turbo car I would say it has done most of its depreciation already.

SSE

RED PASSION

RED PASSION wrote: »

.................. or ripping someone else off either.

Won't happen unless there's a fault with the car.

If you bought your 08 OPC last year from a dealer (as you sold a Polo I'm guessing the OPC replaced it) a private sale asking price of €6000 lower than what you bought it for shouldn't be too far off a mark that might get some interest.

RED PASSION

RoverJames wrote: »

Won't happen unless there's a fault with the car.

If you bought your 08 OPC last year from a dealer (as you sold a Polo I'm guessing the OPC replaced it) a private sale asking price of €6000 lower than what you bought it for shouldn't be too far off a mark that might get some interest.

Bought astra opc 2 years ago next month from a private sale, the polo was sold privately six months or so later, I reduced the price by €400 in one swoop to get rid of it from around the house, it was just nct'ed 3 months before the sale put €150-200 of stuff from tyre to brake hose pipes etc. thought with no nct on it no one would touch it.

in hind sight should have reduced it maybe in €100 increments to see when people would get interested. I don't feel hard done by, but the guy who bought it knew the polo was excellent value for money.

dingding

colm_mcm wrote: »

It's totally inaccurate though, that's probably it's biggest flaw

Any better guidelines as a rule of thumb so.
ðŸ˜႒

galwaytt

RED PASSION wrote: »

Hey Guys & gals,

I would like to know how do i calculate the depreciation of my car (any car), up to now i check on donedeal/ carzone for cars with similar mileage and engine size etc and price around that. if i buy a diesel bmw 3 series 2.0L approx €29000 how much could i sell it for in 3-4 yrs time, doing approx 10-13 thousand miles per year. ( so average mileage) :cool:

Have a 08 astra opc, 2.0L petrol turbo and what to know if i should sell it now or will the depreciation be small enough to hold onto it for two more yrs.

Cheers
Red Passion

My unscientific rule is 3500 per annum on a 30k car.

Me, I'd keep the Astra. If nothing else, it's a rarer car.

RED PASSION

galwaytt wrote: »

My unscientific rule is 3500 per annum on a 30k car.

Me, I'd keep the Astra. If nothing else, it's a rarer car.

My original plan was to keep the Astra OPC for 2/3 yrs and then decide, since 2 yrs is up I was half thinking of selling it, and getting a diesel A4 or BMW 3 series was the idea, but there is plenty of time to buy a car which everyone else has, for now I will enjoy what I have and the uniqueness of it. Thanks galwaytt

Cookie_Monster

20% reducing balance is the standard business rate isn't it (or 25 or 30?)?

30,000 -20% = 24,000
24,000 - 20% = 19,200
19,200 - 20% = 15,360 and so forth

close enough to the divide price by 2 every 3 years too.

strictly speaking selling price and depreciation bear no relation to each other. cost less depreciation equals net value. Selling price less net value equals profit or loss on disposal
/accountant

Zubeneschamali

colm_mcm wrote: »

It's totally inaccurate though, that's probably it's biggest flaw

It's a good rule of thumb. Some models will do a bit better, some a bit worse, but if you can't afford a 50% drop in 3 years, don't buy it.

R.O.R

If you want to find out how much your car will depreciate in another 2 years, go on to carzone and see if there are any models the same as yours that are 2 years older (in your example, look for 2006 Astra OPC models) with roughly the same mileage you will have.

Take the current value of your car (look on carzone for similar models) and subtract the value of one 2 years older, and that should be the depreciation.

All goes out the window though if the gubberment decide to fcuk around with VRT/Road tax, then it's finger in the air time.

cloonton

I thought the rule of thumb was:
20% when you drive it off the lot and register the car in your name (wrong way round, I know)
25% by the end of year of registration
40% by the end of year 3 and
(I'm guessing here) about 1/8 of the residual value each year after that.

There'll always be exceptions, but I'd say this is fairly accurate for most cars.

Go on then... tell me how wrong I am!!

TheZ

When you break it down per month it becomes difficult to justify buying a brand new car if buying personally

40k new car - 500 approx per month in depreciation over 3 years
say you borrow 20k over 3 years to buy it - 600 per month
plus tax, insurance, fuel, servicing, tyres - 350 per month

cost is close to 1,500 a month from after tax income

have done it before myself but not sure I would do it again - the monthly costs are fairly stark

buy same 3 year old car for 20k - no loan

depreciation closer to 300
other costs same - 350
contingencies (as older car) - 100

when you look at it monthly it becomes harder to justify the new car

MrDerp

20% per annum seems to be a good rule of thumb for a used car between 3-8 years. Newer cars (< 3 years) seem to be more skewed by perceived re-sale value. Particularly those aspired to by young men of a certain age (Golfs for the mid 20s, Beemers for the late 20s). Then there's the Diesel nonsense.

My last purchase was a 4 year old volvo (petrol). It had depreciated from about 28k to around 10k when I picked it up (cost of change clouds this a little as the car had full volvo service history, 60k miles).

Applying the 20% rule would have been:
22,400
17,920
14,336
11,468

There was 08s priced at 15.5-16k sticker, so it held well enough there. I did alright on the 4 year old with average mileage, service history, good nick. I got a better than expected trade in value and got the cost of change I was looking for without too much argument (probably could have haggled better). I reckon I paid a bit too much due to the 07 petrol affect, but what harm, got what I was looking for, for the cash I'd put aside.

I actually think my next car will be another 07 petrol, with a mahussive engine. My current cost of motoring is at about 600/month. I'll aim for 700/month and buy the biggest petrol I can afford to run for that.

keithclancy

We use Athlon car leasing, talked to a rep before, he said they have a whole department dedicated to working it out as its due to multiple factors.

E.G.
Market Demand
Fuel Prices
Motor Tax

and a whole heap of other stuff.

Best thing you can do is look at the going rate for an older model of that car now and taken an average minus 5%

bazz26

I don't think there is an exact formula for depreciation. Too many external factors that influence it.

For example, my car is a 2.0 litre diesel currently on low motor tax and has modest deprectiation. Come November the tax will probably shoot up on it which may make it less attractive to a buyer, meaning it will depreciate alot more. So depreciation is not constant as it is influenced by the market force which is forever changing.

RED PASSION

bazz26 wrote: »

I don't think there is an exact formula for depreciation. Too many external factors that influence it.

For example, my car is a 2.0 litre diesel currently on low motor tax and has modest deprectiation. Come November the tax will probably shoot up on it which may make it less attractive to a buyer, meaning it will depreciate alot more. So depreciation is not constant as it is influenced by the market force which is forever changing.

Yeah it is a moving target, i think i can get a rough idea +/- €1000 what my car will be worth come the time to sell it. this is good enough for me, i understand nobody can pinpoint the value of any car or predict what demand will be there for it/ car tax increases etc in 3-4 yrs down the road. I just did not want to really under value my current car or over it and get no potential buyers. Also i wanted a rough idea when buying a second hand car is the asking price fair or is someone trying to pull the wool over my eyes. Cheers all.