How to Calculate Vehicle Depreciation Rate?

[DeStephen]

There are three methods to calculate vehicle depreciation rate: 1. Depreciation percentage = 2 / estimated useful life. 2. Depreciation amount = original value (remaining usable years / total sum of useful years). 3. Annual depreciation amount = original value / estimated useful life. Below are relevant details about depreciation: 1. Depreciation method: The straight-line method is recommended, firstly because it is simple and easy to implement, and secondly because it complies with the relevant provisions of the "Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China". Article 59 of these regulations clearly states that "depreciation calculated using the straight-line method for fixed assets is deductible". Article 60 further specifies the minimum depreciation period for fixed assets: "Transportation tools other than aircraft, trains, and ships, 4 years". 2. Electronic equipment and transportation tools other than trains and ships, as well as tools, furniture, etc. related to production and operation, have a depreciation period of 5 years, with a residual value ratio uniformly set at 5% of the original price. Therefore, according to tax law, passenger cars have a depreciation period of 5 years and a residual value rate of 5%. Even for used cars, their depreciation period is calculated as 5 years from the date of purchase.

[DelVivian]

I've driven several cars, and calculating depreciation is quite simple: subtract the current value from the purchase price, then divide by the purchase price and multiply by 100. For example, if you bought a new car for 150,000 last year and now it's only worth 120,000, the depreciation rate is 20%. However, this isn't fixed—a car typically loses 15-20% of its value in the first year and is worth about half after five years. The brand has a significant impact; Toyota and Honda hold their value well, while my domestic SUV depreciates much faster. I often refer to used car apps, which automatically calculate the current price based on the car's age and mileage, and the results are quite accurate. Don't forget that a full service history, fewer accidents, and a well-maintained interior can increase the value a bit. Daily short-distance driving and regular maintenance, like oil changes and car washes, can also slow down depreciation.

[SamuelMarie]

I've observed that depreciation rate is crucial when selling a car. Generally, there's about a 20% loss in the first year, accumulating to 50% by the third year. The calculation method is remaining value divided by original price - for example, if the initial price was 200,000 yuan and it's worth 100,000 yuan after three years, the rate would be 50%. However, market fluctuations have significant supply-demand effects. During the pandemic period, used car prices rose and depreciation slowed. High-resale-value cars like the Toyota Camry maintain above-industry standards - well-maintained ones depreciate slower. I'd recommend choosing popular models, driving less long-distance, and regularly checking maintenance records.

[OMaya]

I just learned that depreciation rate sounds complicated but is actually easy to calculate. It's the purchase price minus the current price, divided by the purchase price, giving a percentage. For example, I spent 100,000 to buy a car, drove it for two years, and now it's worth 70,000, so the rate is 30%. But my teacher said the real rate depends on factors like the car's age, brand, and mileage. You can search online for a small tool, input the data, and get the result in a second—simple and cost-effective. Choosing a brand with good resale value, like Japanese cars, can help you lose less money.