How to calculate depreciation on a car?

[Picopico]

BMW 320IA

 

Price $82,800

 

Transmission Auto

 

Engine cap 1995 cc

 

Reg date 17-Jun-2005

 

Mileage 37,500 km

 

Features 6 x Airbag, Driver Electric Memory Seat, Push Start Button, Multi Function Steering, Auto Wiper, Auto Head Light.

 

Accessories Sport Rims, Leather Seat, Premium System 6 CD Changer, Fog Lamps, Keyless, Reserve Sensors, Solars Film.

 

Description 100% Showroom Condition, Accident Free, 6 Speed Valvertonic Dynamic Stability Control Dtc Traction Mode, Road Tax Till 6/2009.

 

COE $16,508

OMV $41,734

Depreciation $8,866 per year

 

................................................................................

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Based on above, I thought the scrap rebate is 85% of OMV or S$35,473/-. So shouldn't the depreciation be Purchase Price minus Scrap value divide by number of years left. In this case, it would be 6.75 years.

 

So ( S$82,800 - S$35,473 ) Divide by 6.75 years remaining : Depreciation S$7011/-.

 

 

How come the dealer say depreciation is S$8,866 per year? Am I missing something?

 

Please help. Thks.

Edited September 12, 2008 by Picopico

[Tohto]

Yes, the depreciation is correct.

 

Sell= $82,800.00

OMV= $41,734.00

ARF (110% OMV)= $45,907.40

PARF @ 10 yrs= $22,953.70

Remaining yrs= 6.75

Depreciation= 8866.118519

[Picopico]

Thks Bro,

 

So if I scrap the car just before fifth year the rebate will be 75% of PARF.

 

Or 0.75 X S$45,907 or S$34,430/-.

 

And if the car body has a value, say S$10,000 and the COE rebate is half of S$16,508. The total I can get back will be S$52,684/-.

 

Then depreciation will be about S$30,000 for 1.75 years or S$17,142 a year!

 

Wow, Like that second hand cars oso dun make sense leh!!! Hmmn...........

 

Dunnoe how much the car body will be worth though.

[Yaloryalor]

If you scrub your car then it will lost more but for BMW should able to sell in 2nd hand market.