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Depreciation


N3WOB
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Guys, just doing some sums...

trying to work out likely depreciation p.a. over the next 3 years on my 2004 32.

Assuming it is worth c.£17k now and I'm doing average mileage, what do you reckon I will lose on it..£800, £1k p.a. on average for next 3 years?

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Not sure, but I'm working on the basis that my 03 R32 will be worth £12.5k in about 4 years from date of manufacture, which is about 18 months from now.

I reckon that as the price drops it becomes more affordable to many of those who point and stare right now, ie MaxP tyres, younger drivers, etc, so it will hold its value in the latter 2 years, ie years 3 and 4 of my depreciation model.

If I get £12.5k for it, assuming I keep it that long, then I'll be happy as I'll not lose any money on it. Right now I'm down about £1k.

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If you are using standard accounting depreciation, as we do with my R, which is a company car, then you are looking at 25% per year reducing balance.

In normal English tongue.gif, the value of the car reduces by 25% per year based on the value at the start of the year.

Value at 5/10/2004 £21,000 - purchase price

Value at 5/10/2005 £15,750 (which is £21,000 minus £5,250 - or 25% of £21,000)

Value at 5/10/2006 £11,813 (which is £15,750 minus £3,937 - or 25% of £15,750)

Value at 5/10/2007 £8,860 (which is £11,813 minus £2,953 - or 25% of £11,813)

So will your immaculate .:R32 only be worth £8,860 in October 2007?

As a 4 1/2 year old car, it probably will be.

Will you have had fantastic value for money? Yup 169144-ok.gif

Might you get more than £8,860 in October 2007? Hard to say, but if you do, consider it a bonus.

Oh, and don't count on getting any more for your car if you've got a Milltek, remaps etc.

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Was fine with Northy's comments & then I read the rest! Cheers guys you've really made my day, I'm even poorer than I thought!

25% per year on a reducing value basis seems bl00dy extreme - you sure you're not on the fiddle to buy the car cheap at the end there Charlie <tongue smiley>

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I generally don't go by standard business account deprecation as its not proven itself in the past for me (I have my own business).

From a dealer perspective, yes I think it would be about £9.5K on trade after 4 years. My old A3 would've been worth £8500 by accounting standards when I tradeded it, and £10500 by the book but I got £11600 from a dealer for it.

My numbers are based on the fact that as it reaches the lower numbers it become more desirable to those who can afford it, ie more people can afford £12k car than a £15k car and even more than those who can afford a £18k car, and so on.

So, as you get to those kinds of figures the value tails off and depreciation slows. Has alsways been this way with previous cars, I see no reason why it should change for the R32.

But your right, you'll get diddly-squat extra for any additiobnal parts that have been fitted, ie exhausts, etc.

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[ QUOTE ]

25% per year on a reducing value basis seems bl00dy extreme - you sure you're not on the fiddle to buy the car cheap at the end there Charlie <tongue smiley>

[/ QUOTE ]

Erm no, Rossie!

I don't think I'll be keeping it that long, and when it's got 80K+ miles on it, I'll be looking for something else!

[ QUOTE ]

Hear that Charlie lol.gif Don't spend any more on it!

[/ QUOTE ]

Bollox Rossie! NONO3.GIF

More money = More speed = More fun 169144-ok.gif

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Just traded my Nov 03 silver 3 door with 19k. Needed new front tyres, 1 alloy refurb but did have rear pdc, tracker and anti hijack. The dealer was offered £16250 initially in the trade but it dropped to £16000 when the new Glass's guide came out.

So I guess you're looking at £250 per month which is £3k per annum.

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Aye, trade prices are gash at the mo, and as per other 'books' don't really reflect the true price of the cars (in general) but delaers are more tahn happy to quote Glass's figures when offering trade but go by their own figures when selling!

But assuming a £3000 p/a drop, that would roughly equate to a £12k in 18 months time, so I'd be happy with that!

Private sale, maybe £13k smile.gif169144-ok.gif

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