Quote:
Originally Posted by GGG
Based on your depreciation numbers above the two year old truck should only cost between 26k and 29k. So you jacked up the used price significantly.
You also can’t use purchase price when determining the cost of a vehicle. You need to use depreciated cost in the year you plan to sell minus purchase price. Your cost of ownership is based on the decline in value each year.
The cost of that 50000 truck in year 1 is 15,000. The cost of the two year old truck in its year one is 3000 plus the interest rate differential (about 2k). In year 4 and 5 of new vs 6 and 7 of old you would need to include more maintenance cost in the older vehicle. However despite all that it would need to be an exceptional scenario for the lifecycle cost per km to be higher on a 2 year old car than a brand new one over the next 5 years of ownership.
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As I said earlier values vary depending on market. Trucks are currently carrying value very well as the US market has inflated the prices. Also you can’t compare trade in value (depreciated price) to retail price of the Used one. I used theses numbers as they are accurate comparables, it’s what I do every day. Really should you own the truck for 5 or more years the depreciation can be looked at as irrelevant, and to a lot of consumers it is! Other then property, the depreciation in everything we own is sickening, from electronics to clothes to home furnishings, you name it and it’s far worse on those items then it is on a truck. That $3500 sofa set you bought 5 years ago??? $250.