What is the Depreciation Period for Vehicles?
4 Answers
Depreciation Period for Vehicles is 4 years. Below is an introduction to the meaning and calculation methods of vehicle depreciation: Meaning of Depreciation Period: 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, that is, the time that the fixed asset could continue to be used after enduring physical wear and tear and natural wear and tear. Calculation Methods for Vehicle Depreciation Period: Annual depreciation amount = original value / estimated service life. Depreciation can also be calculated based on the distance traveled, where depreciation amount = original value (distance already traveled / estimated total distance). Fixed assets depreciated using the work output method are generally considered to have relatively even wear and tear during operation, but they basically cannot provide economic benefits outside of operation.
The depreciation period for vehicles under tax regulations is generally 4 years. According to the Corporate Income Tax Law, fixed assets such as cars are usually depreciated over 4 years. This means that after a company purchases a new car, the cost is deducted over 4 years in accounting, allowing for more accurate profit calculations. From the perspective of individual car owners, the value drops most sharply in the first three years—for example, a new car may only be worth 80% of its original price after one year, and the decline accelerates over the next two to three years. Cars older than the depreciation period can still be driven, but their resale value is much lower. To save money, I recommend understanding local tax policies, planning expenses wisely, and noting that with proper maintenance, a vehicle can often last over 10 years.
As a car enthusiast, I find the topic of vehicle depreciation quite practical. From a tax perspective, it's about 4 years, with national regulations requiring enterprises to calculate costs over 4 years for clear financial statements. Based on my personal car ownership experience, the value drops rapidly in the first three years—a brand-new car loses 20% of its value immediately after purchase, and may be worth only half after five years. In real life, cars can last much longer, easily over a decade, though their value keeps shrinking. The used car market prices vehicles based on age, with older models fetching lower prices even if they're in good condition. Reasonable driving and maintenance can slow value loss, but the legal depreciation period is fixed. Understanding this is helpful for buying and selling decisions.
The depreciation period for vehicles is generally 4 years, as stipulated in tax laws for corporate vehicles. Their value declines rapidly over time, with new cars depreciating by 20% in the first year and significant losses occurring within three years. From a market perspective, used car prices are closely tied to vehicle age—higher age means lower prices. Buyers should carefully check vehicle condition reports, as some well-maintained cars can last over a decade, though the tax depreciation period remains unchanged.
