Valuing a used truck depends not only on its model year, drivetrain configuration, mileage, and condition, but also on features, maintenance history, and more. This article will guide you on how to value a used truck in a detailed and accurate manner.
Used truck price chart and average depreciation rates
Calculating the True Value of a Used Truck
To accurately value a used truck, you need to calculate its on-road price when new, then determine its average depreciation rate and apply the valuation formula.
Truck On-Road Price
The on-road price is the actual cost a buyer pays to own the vehicle, which is usually much higher than the listed selling price.
On-Road Truck Price = Listed Price + Vehicle Registration Fees (On-Road Costs)
Vehicle registration fees include:
- Civil liability insurance (compulsory insurance, depending on vehicle type)
- Vehicle inspection fee (depending on vehicle type)
- Road maintenance fee (depending on vehicle type)
- Registration tax: 10% (or 12% in Hanoi)
- License plate fee (depending on locality)
- Service fees (if any)
How to calculate on-road car price in Vietnam
Average Truck Depreciation Rate
Depreciation is the systematic valuation, calculation, and allocation of an asset’s value due to wear and tear over time. On average, a truck depreciates from 100% to 0% over 25 years (average 4% per year). More specifically:
- Years 1-3: 5% – 8% per year.
- Years 4-7: 5% – 7% per year.
- Years 8-10: 8% per year or more.
To calculate depreciation, you need to know:
- Original cost: The initial cost to purchase the asset.
- Useful life: The estimated period of asset usage.
- Salvage value: The asset’s remaining value at the present time.
- Depreciation method: The method used to calculate the decrease in value of fixed assets over time.
Simple method for calculating car depreciation
3 Key Criteria for Accurate Used Truck Valuation
1. Truck Model Year
The model year indicates when the truck was manufactured, its listed price, and its level of wear and tear. The truck’s value decreases over time, based on the year the model was produced.
2. Truck Condition
“Truck condition” is assessed based on factors such as mileage, production year, brand and model, exterior and interior appearance, engine and transmission, parts and maintenance, paperwork and license plate, price, and negotiation. Trucks with low mileage, newer models, reputable brands, good appearance, well-functioning engines, and complete maintenance history have a higher “truck condition” rating.
3. Liquidity
Liquidity refers to the popularity of the truck model in the market. Trucks with high liquidity will not depreciate too much when resold.
Other Factors Affecting Used Truck Prices
In addition to the 3 criteria above, other factors also affect resale value:
- Vehicle color: Popular colors like black, silver, and white are usually easier to resell.
- Additional features: Trucks equipped with valuable additional features will have a higher price.
- Maintenance history: Trucks with regular maintenance and complete invoices will be valued higher.
- Vehicle condition before sale: Trucks that have been inspected and had damaged parts replaced before sale will command a better price.
How to value a car and average depreciation rates
Conclusion
Valuing a used truck is a process that requires considering many factors. By applying the criteria and noting the influencing factors mentioned above, you can accurately value a used truck and make a reasonable buying or selling decision. Research thoroughly and consult experts to make the best choice.
