Card depreciatin rates worsening.

  jack 09:14 13 Mar 08
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I have always thought the rate of value reduction to be an artifact by the industry to keep the metal coming out of the factories- nothing to do at all with the true usefulness of the vehicle.
After all the loss of value of other objects is not so structured.
Fleet users and individuals calculate best use of capital so turnover 'stock' to minimise 'losses'
however the way I have run my vehicles maximises
the usefulness of my capital I feel, but does no favours to the industry.
I buy a 'young' used vehicle that has immediately lost its greatest part of initial investment- and run it until it becomes a smoking unrepairable ruin - typically ten years.
Even taking a 'heavy' mechanical replacement the total cost of the period has so far come nowhere near the losses incurred on say three vehicles.

  interzone55 09:37 13 Mar 08

Car value used to drop by an average of 40% over three years, now 60% is common.

This is mainly caused by deep discounts given on new cars, and the fact that the biggest used car market - teenagers - has disappeared because they tend to buy cheap new Peugeots & Citreons because they often offer free insurance in the deal...

  spuds 11:23 13 Mar 08

One thing that I have noticed lately, is the increase in scrap monetary value, especially with motor vehicles. At one time, scrap vehicles were being dumped everywhere because no one wanted them, now the scrap yards are offering a reasonable return.

  Quickbeam 11:54 13 Mar 08

Part of the reason is the ever tightening standards for emissions. A 3 year old car with various engine management faults, can render the car an uneconomic repair. If it can't pass a first MOT the price has to drop so that it then becomes an economic repair for someone, or you scrap it.

The scrap value has increased because of the good quality of trims and other bits on newer scrapers, these can easily be refitted to upgrade a lower spec model.

The 20% per year depreciation is common on vehicles because we're well off. We always want a new one... the more new ones sold, the more secondhand one there are to drive the price down. Yesterdays announcement of low emissions vehicles having no road tax in the first year will bring even lower used prices in the next few years.

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