What is the depreciation period and residual value rate for sedans?
3 Answers
The depreciation period for sedans is ten years with a residual value rate of 5%. Here are the specific calculation methods: 1. First three years: The value decreases by 15% annually for the first three years; 2. Middle four years: The value decreases by 10% annually for the middle four years; 3. Last three years: The value decreases by 5% annually for the last three years. Note: Considering factors such as changes in new car prices, depreciation rates, and vehicle condition patterns, selling the car in the third year or the sixth year is actually the most cost-effective. The residual value rate for vehicles that are one to two years old and considered '80% new' is the lowest because new car prices are immediately discounted by 20% once sold by 4S dealerships.
When buying a car, the depreciation period is typically around 5 years, with a residual value rate of about 5% to 10%, depending on the car's condition and brand. For example, a new car driven for 5 years might only be worth 10% of its original price, but if well-maintained—like regular oil changes and avoiding accidents—the residual value can be higher. Different brands vary significantly; Japanese brands like Toyota and Honda have higher residual values due to their durability, while European and American cars may depreciate faster. I suggest that beginners consider this when buying a car—don’t just look at the new car price, as the residual value affects your budget when reselling. Additionally, in actual use, exceeding 100,000 kilometers accelerates depreciation, so controlling mileage helps retain value. In short, understanding depreciation saves you money—don’t regret it only when selling the car later.
From a financial perspective, the depreciation period for sedans is generally 4 years with a residual value rate of 5%, which is the tax code standard. The straight-line method is used for depreciation calculation, reducing the book value proportionally each year. For example, a car with an original price of 200,000 yuan would have a book value of around 10,000 yuan after 4 years. The low residual value rate is due to rapid vehicle wear and high maintenance costs. I remind everyone that depreciation affects not only accounting but also personal finance—choosing brands with low depreciation when buying a car can reduce long-term expenses. In practice, brand reputation has a significant impact; luxury cars depreciate quickly initially but stabilize later. Don’t overlook insurance and maintenance records, as they also determine residual value. Properly planning vehicle usage and avoiding frequent car changes can maximize asset value.
