Calculating Truck Depreciation: A Comprehensive Guide for Smart Investors

Anh Tuan, residing in Gia Lam, plans to purchase a 5-ton Hyundai truck for transporting construction materials. Browsing online, he found the price of a brand new truck at the Hyundai Giai Phong dealership quite steep. Seasoned truck drivers from Nguyen Van Linh street advised him to consider a used truck, offering a more affordable price while still being capable of heavy work.

He’s been pondering, worried that a used truck might break down quickly and depreciate rapidly. So, how do you calculate truck depreciation accurately? This article will provide you with the most detailed and precise information!

A 5-ton Hyundai truck carrying construction materials

What is Truck Depreciation?

Simply put, depreciation is the decrease in the value of a truck over time. The older the truck and the higher the mileage, the lower its value. Understanding depreciation helps you:

• Estimate Costs: Determine monthly vehicle operating expenses to make informed investment decisions.
• Assess Used Truck Value: Calculate the remaining value of the truck for resale or disposal, avoiding being lowballed.

How to Calculate Truck Depreciation

Currently, there are two common depreciation calculation methods:

1. Straight-Line Depreciation Method

This is the simplest and most widely used method.

Formula:

(Original Value – Salvage Value) / Useful Life (years)

Example: Anh Tuan buys a used 5-ton Hyundai truck for 500 million VND, plans to use it for 5 years, and then resell it for 100 million VND.

Annual Depreciation = (500 – 100) / 5 = 80 million VND

2. Units of Production Depreciation Method

This method is suitable for trucks with high activity and mileage.

Formula:

(Original Value – Salvage Value) x Mileage Driven in the Period / Total Estimated Mileage

Example: Anh Tuan estimates the truck will run about 200,000 km in 5 years. In the first year, the truck travels 50,000 km.

First Year Depreciation = (500 – 100) x 50,000 / 200,000 = 100 million VND

Truck Depreciation Table (Reference)

Note: This table is for reference only. Actual depreciation may vary depending on the truck model, condition, year of manufacture, and market conditions.

Truck depreciation table

Important Considerations When Calculating Truck Depreciation

• Salvage Value: Difficult to determine precisely and depends on various factors. Refer to the market price of similar used trucks.
• Repair and Maintenance Costs: Not included in depreciation but are significant expenses. Choose a quality truck and perform regular maintenance to minimize these costs.
• Feng Shui: Vietnamese people believe in choosing auspicious dates for purchasing vehicles to bring good luck.

Frequently Asked Questions

1. Should I Buy a New or Used Truck?

Answer: It depends on your needs and financial capabilities. New trucks offer better quality but are more expensive. Used trucks are more affordable but require thorough inspection before purchase.

2. Which Truck Has the Best Fuel Economy?

Answer: Japanese truck brands like Hino and Isuzu are often highly regarded for their fuel efficiency.

3. What Procedures Are Required for Truck Financing?

Answer: You need to prepare documents proving your income, collateral, and contact a bank or financial institution.

Where to Buy Reliable Trucks in Hanoi?

XE TẢI HÀ NỘI is proud to be a provider of quality trucks at competitive prices. We offer a wide range of trucks, from light trucks like the Kia 750kg to heavy trucks, meeting all transportation needs. XE TẢI HÀ NỘI also offers attractive financing options with simple and fast procedures.

Visit our showroom in Cau Giay, Hanoi, or contact our hotline for detailed consultation!

Conclusion

We hope this article has provided a clear understanding of how to calculate truck depreciation. Be a wise investor and choose the option that best suits your needs and financial capabilities. We wish you success!