Lately out of curiosity, I decided to check out the value of my 7 year old Japanese car. A search at sgcarmart revealed that the same make/model/year cars would have asking prices of between $20,000 to $25,000 depending on mileage and month of registration.
I bought this car in 2006 for $46,000 (no loan) and the car has a residual value in 2016 of $6,000. This means the average depreciation over 10 years is $4,000 yearly, assuming a straight line depreciation accounting.
However, if I can sell my car at $22,000 now (lower end of asking prices), my average depreciation will be ($46,000-$22,000)/7 years =$3429.
This means that I should sell my car now, as if I have held to “maturity”, my depreciation will be at a much higher rate of $4,000 per year!
According to straight line depreciation of $4,000 per year, my car should be worth only (Read more...)
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