Average Depreciation of Cars in India

[man23ish]

This is for academic interest as well as helping me making a decision on whether to go for a new/ used vehicle.

I searched through this web-site and could not find any links on depreciation so thought of starting this poll.

Basically, i am interested in knowing that how much does the cost of a vehicle depreciate year-on-year in India. What are the manufacturers, whose vehicles' cost depreciates substantially, whereas the manufacturers whose vehicles hold their value over a period of time.

I am interested in knowing your thoughts on this thread as well

[dadu]

There is no need for a poll, you should have looked at the Income tax website, the (correct) answer for all will be same for private vehicles i.e. 15%, , for commercial vehicles its 40%, its the law not a choice.

See here under 'III. Plant and Machinery'

[man23ish]

Originally Posted by dadu

There is no need for a poll, you should have looked at the Income tax website, the (correct) answer for all will be same for private vehicles i.e. 15%, , for commercial vehicles its 40%, its the law not a choice.

See here under 'III. Plant and Machinery'

Dadu,

Thanks for the information, that was quite helpful. But, in the resale market those statistics are of no use right? People who are selling used cars are asking for irrational prices for their vehicles. So in other words, i am trying to find out how much value of the original value does an average passenger vehicle hold year-on-year.

Manish

[1100D]

Such a poll is also helpfule for people willing to sell their cars. It seems, when people are trying to sell their cars, they get peanuts, at the same time, when people buy them they complain of irrational prices, middlemen take the cake.

[dadu]

Very difficult to ascertain even through a poll since it will be dependent upon many factors :

- Which car are you trying to sell, each one has its own demand/supply.
- Year of purchase
- Condition of the car, this is unique to each car
- In which city are you trying to sell, market forces
- Model of the car, if new models are launched afterwards/obsoleted, resale might go down.

Originally Posted by man23ish

Dadu,

Thanks for the information, that was quite helpful. But, in the resale market those statistics are of no use right? People who are selling used cars are asking for irrational prices for their vehicles. So in other words, i am trying to find out how much value of the original value does an average passenger vehicle hold year-on-year.

Manish

[nitrous]

20% for the first year
15% for the second year
10% for the third year.

But, the market also operates in a different way by taking the demand of a car into account.

[man23ish]

Originally Posted by 1100D

Such a poll is also helpfule for people willing to sell their cars. It seems, when people are trying to sell their cars, they get peanuts, at the same time, when people buy them they complain of irrational prices, middlemen take the cake.

Totally Agreed, I am with you 100% !!

[GTO]

Are you talking about book depreciation or real-world deduction in value? For book depreciation, there are already exacting formula. However, Ajmats excellent article covers all the factors that affect actual depreciation / resale value.

[man23ish]

Originally Posted by GTO

Are you talking about book depreciation or real-world deduction in value? For book depreciation, there are already exacting formula. However, Ajmats excellent article covers all the factors that affect actual depreciation / resale value.

Thanks GTO,

The article is really interesting.

If wishes were horses, people would fly.. Alas the real world is so different from the book-world.. Its the same as the difference between Theory/ Practice.

[swageo]

Used Cars, New Cars, Buy Car, Sell Car, New Car Pricing, Used Car Values, Car Loan, Car Insurance - CarWale.com India

Above site has a tool which tells you the value of your car. Comparing the results with current market price gives you an idea.

I have compared Skoda cars with Honda Civic (you know why), and found

Skoda depreciation for first year is only 6%, while Civic's depreciation for first year is 15% !!

Is this correct ? Should I reconsider my plan to go for Civic :-)