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Guessing approximate depreciation in coming year(s).



 
 
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  #1  
Old October 24th 05, 11:59 PM
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Default Guessing approximate depreciation in coming year(s).

I guess this is something that a lot of us would be interested in, but
I can't seem to find any way of figuring out how to go about this.

I have a 85K miles, 6 year old BMW 2000 323i 4dr sedan . From the
dealer price 2 years back (24500) to its current KBB value (15500), it
has depreciated $9000.

I am in a situation where I just *need* to figure out the monthly
depreciation of this car for the next 1 or 2 years. Is there any way of
finding this out? Assuming excellent condition and 15K per year
mileage.

Surely, the rate won't be 4500/year cause that way in 3.5 years this
car would be at $0 !? Logically, the depreciation rate should fall
every year (highest in the 1st year, and gradually decreasing every
year after that). Is this assumption correct?

Is KBB/Edmunds etc based on statistical data on local sale prices? Or
is there a way to approximately predict the value after a year or two.

Any information will be highly appreciated!

Thanks

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  #2  
Old October 25th 05, 11:45 AM
Jack
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Posts: n/a
Default Guessing approximate depreciation in coming year(s).

It would seem that the declining balance method of depreciation would be the
most appropriate. Looking at KBB values across 4 years centered on 2000 it
looks like your car will depreciate about 20% per year for the next couple
of years. So if the current value is $15500, then the depreciation for the
next year will be $3100 or about $250 per month. This leaves the residual
value at $12400 for the next year and then the depreciation would be $2480
or about $200 per month and be worth about $10000 after two years. You can
get a more accurate figure by plugging the appropriate mileage, condition,
and options information into KBB.


> wrote in message
ups.com...
>I guess this is something that a lot of us would be interested in, but
> I can't seem to find any way of figuring out how to go about this.
>
> I have a 85K miles, 6 year old BMW 2000 323i 4dr sedan . From the
> dealer price 2 years back (24500) to its current KBB value (15500), it
> has depreciated $9000.
>
> I am in a situation where I just *need* to figure out the monthly
> depreciation of this car for the next 1 or 2 years. Is there any way of
> finding this out? Assuming excellent condition and 15K per year
> mileage.
>
> Surely, the rate won't be 4500/year cause that way in 3.5 years this
> car would be at $0 !? Logically, the depreciation rate should fall
> every year (highest in the 1st year, and gradually decreasing every
> year after that). Is this assumption correct?
>
> Is KBB/Edmunds etc based on statistical data on local sale prices? Or
> is there a way to approximately predict the value after a year or two.
>
> Any information will be highly appreciated!
>
> Thanks
>



 




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