Question re 62 plate XC90 depreciation.

[Jake21]

Evening all..

looking at getting a 62 plate D5 200 SE Nav Auto from a dealer with approaching 50k on the clock.

It's in v good condition and has had all the correct services by Volvo dealers.

My question is - how much (approx) do people think this car liable to depreciate over the next 4-5 years..?

Any ideas, as this will influence the potential purchase.

thanks,

AP.

[cheshired5]

Just look at current prices for 9/10 year old XC90s and you won't be a mile off predicting, that's assuming diesels don't die a death in the meantime.

[Jake21]

so that appears to be anything from 4-7k (given my quick search..!).

that sound about right?

[cheshired5]

Yep. The range can be quite wide and often depends on maintenance history so it's a balance between keeping on top of that to retain a good resale value but not letting expense run away with itself never to be recouped.

[Jake21]

that's a great help!

so assuming approx 5k depreciation over 4 years, meaning a resale of approx 10k..

to me that seems pretty good - assuming no gremlins appear when the car comes out of the warranty period...

[SwissXC90]

For those reading this who do not live in the UK (like myself) that have to google to understand the UK terminology of "62 plate":

A 62 plate means the vehicle was first registered in the UK in 2012
It means it is likely a MY2012 Volvo, but could be older, depending on how long it took from manufacture date to selling date

As a rule of thumb, subtract 50 from the xx-Plate number to determine the year of first registration, for cars registered after 2001.

To the mathematical question of depreciation:
A rule of thumb is 20% depreciation in year 1 then 15% per year thereafter.

From http://smallbusiness.chron.com/avera...cle-64934.html
While different cars depreciate at different rates, it's a good rule of thumb to assume that a new car will lose approximately 20 percent of its value in the first year and 15 percent each year after that until, after 10 years, it's worth around 10 percent of what it originally cost. This means that a $30,000 vehicle will be worth $24,000 after the first year, $20,400 after the second year and $17,340 after the third year.

Yes, depreciation rates vary by country and market. But let's use these numbers to do the math.

A 2012 vehicle purchased in 2017 is already 5 years old
Using the purchase price of 15000 and 15% depreciation per annum gives us:
Year 0 (purchase year) = 15000
Year 1 = 15000 less 15% = 12750
Year 2 = 12750 less 15% = 10837
Year 3 = 10837 less 15% = 9211
Year 4 = 9211 less 15% = 7830
Year 5 = 7830 less 15% = 6655

15000 less 6655 = 8345 depreciation over 5 years, averaging at 1669 per year.

You can also apply the reverse equation to the vehicle to determine the approximate new price:
Reversing of the first 5 years of depreciation, assuming that the vehicle is 5 years old with a current value of 15000, results in a new value of around 36000. If the new value is known to have been higher than 36000, it means it has depreciated more than 20% in 1st year and 15% per annum thereafter, which means it becomes a better deal to buy (providing mechanically and cosmetically sound).

Yes, I am an engineer.
Yes, I excelled at maths at school.

[Just Drive]

The Budget is coming up on 22nd November and I'd wait to hear what's in store for the diesel car.

The one you're looking at will be a Euro5 spec but they are big polluters with VED already over £300. This could significantly ramp up with the big cities also targeting polluters by either charging or banning them.

You could easily find in 4-5 yrs time you couldn't even give it away!

[cheshired5]

Originally Posted by SwissXC90

For those reading this who do not live in the UK (like myself) that have to google to understand the UK terminology of "62 plate":

A 62 plate means the vehicle was first registered in the UK in 2012
It means it is likely a MY2012 Volvo, but could be older, depending on how long it took from manufacture date to selling date

A 62 plate was registered between 1st September 2012 and 28th February 2013 and unless it was old stock lying around (unlikely) it will almost certainly be a 2013 model year.

[Considered1]

I think the biggest loss on any second hand vehicle is how much you re effectively putting in the dealers pocket compared to what it’s worth to the trade/someone else. Do this on your trade in as well and you could easily be £,000’s down before you start, depending on the vehicles of course.

I also think mileage has as much to do with age, particularly on the Volvo’s

[jamie1131]

Have a look around. It’s heavily dependent on mileage. You can pick up a 10 year old xc90 for as little as £2000 privately. If it’s less than 100k miles when you sell at tens years old my bet would be £7000 if you sell it privately or £3000-£4000 if you trade it in.