What is the Depreciation Period for Sedans?
2 Answers
The depreciation period for cars is 4 years. Below is an introduction to the meaning and calculation method of car depreciation: Meaning of Depreciation Period: The depreciation period refers to the number of years used to calculate the depreciation of fixed assets. For a long time, the depreciation period of fixed assets was determined based on the physical service life, i.e., the time the fixed asset could continue to be used under physical wear and tear and natural deterioration. Calculation Method for Car Depreciation Period: Annual depreciation amount = original value / estimated useful life. Depreciation can also be calculated based on the mileage driven, where depreciation amount = original value × (mileage already driven / estimated total mileage). Fixed assets depreciated using the units-of-production method are generally considered to have relatively uniform wear during operation but provide little economic benefit outside of operation.
I just bought a car not long ago, and my friend mentioned the depreciation period of sedans to me. According to tax laws, it's generally 5 years, meaning from the time you buy a new car, its value will decrease year by year over the next 5 years. This is mainly for accounting purposes, where the car's price minus a 10% residual value is evenly allocated to annual depreciation. But honestly, as an average car owner, I'm more concerned about the actual driving experience. The first year of a new car sees the fastest depreciation, reportedly losing 15%-20% of its value, and then it slows down. I bought my car from the used car market, and it has already depreciated significantly after just two years. I regret not buying a brand with higher resale value, like Toyota. Now, by maintaining it more diligently, I can keep the car running for a few more years without affecting its use as a daily driver. The concept of depreciation is quite important when making car purchase decisions, especially when on a tight budget—you have to consider long-term depreciation.
