What is Your Vehicle Worth After 5 Years? Truck and Depreciation – Read before buying

As a buyer,  you would be considering various factors while buying a new truck for a business purpose. One of the main factors among all is the return value or effects of depreciation. 

In this article , Logistic Heroes – Logistic Magazine India we have given a detailed analysis on how a truck undergoes depreciation and what it might be worth after 5 years of use. With the information you can make better decisions during your purchase. 

Key Factors Influencing Truck Depreciation 

Age plays a crucial role, with the steepest depreciation occurring in the first three years. Trucks generally depreciate at a slower rate of 35-45%, depending on various factors: 

• Brand reputation and reliability 
• Maintenance history and overall condition 
• Market demand for specific models 
• Mileage accumulation 
• Economic conditions and fuel prices 
• Regional factors and local market demand 

Truck depreciation

Let’s analyze real-world examples of truck depreciation across different price segments: 

Mini Truck Depreciation Analysis (5-Year Period) 

1. Entry-Level Segment (₹12 Lakh Original Price) 

• Estimated value after 5 years: ₹7.2-7.8 Lakh 
• Depreciation percentage: 35-40% 
• Better value retention due to high demand in commercial sector

2. Mid-Range Segment (₹17 Lakh Original Price)

• Estimated value after 5 years: ₹9.9-10.7 Lakh 
• Depreciation percentage: 37-42% 
• Moderate depreciation influenced by features and brand value 

3. Premium Segment (₹21 Lakh Original Price) 

• Estimated value after 5 years: ₹11.8-12.6 Lakh 
• Depreciation percentage: 40-44% 
• Higher depreciation due to luxury features and maintenance costs 

4. High-End Segment (₹28 Lakh Original Price) 

• Estimated value after 5 years: ₹15.4-16.8 Lakh 
• Depreciation percentage: 40-45% 
• Steeper depreciation due to higher initial cost and specialized features

How to Reduce the Depreciation Losses: 

1.Try choosing Famous Colors: 

Neutral colors like white, silver, and black typically retain value better than trendy or unusual colors. 

2. Regular Maintenance : 

• Follow manufacturer-recommended service schedules 
• Keep detailed maintenance records 
• Address repairs promptly 
• Maintain clean interior and exterior 

3. Controlled Mileage: 

• Annual mileage below 20,000 km helps retain value 
• Highway miles are generally better than city miles 
• Consider usage patterns when purchasing

4. Market Timing: 

• Purchase during favorable market conditions 
• Consider selling before major model updates 
• Monitor market trends for optimal selling time 

Investment Perspective 

While trucks generally depreciate less than cars, they’re still depreciating assets. However, commercial users can often offset depreciation through: ● Business tax benefits 

• Revenue generation 
• Higher resale value in specific markets 
• Lower insurance costs compared to passenger vehicles 

Making a Profit 

Though challenging, making a profit on a truck sale after five years is possible under certain conditions: 

• Purchasing at significant discounts 
• Maintaining excellent condition 
• Selling during high demand periods 
• Capitalizing on market shortages 
• Adding valuable aftermarket modifications 

New truck delivery

The Reality Check: 

Most truck owners should expect some depreciation loss. However, trucks often serve as business tools, making their value proposition different from personal vehicles. Consider the total cost of ownership, including, 

• Fuel efficiency 
• Maintenance costs 
• Insurance expenses 
• Financing terms
• Utility value 

Real-World Truck Value Examples (2018-2023) 

TATA Ace Gold 

• Purchase price (2018): ₹12 lakh 
• Current market value (2023): ₹7.5 lakh 
• Lost value: Around ₹4.5 lakh 
• Real depreciation seen: 37.5% 

Mahindra Bolero Pickup 

• New in 2018: ₹17 lakh 
• Market value today: ₹10.2 lakh 
• Value decrease: ₹6.8 lakh 
• Actual depreciation: 40% 

Eicher Pro 2049 

• Cost in 2018: ₹21 lakh 
• Today’s resale: ₹12.1 lakh 
• Money lost: ₹8.9 lakh 
• Market depreciation: 42.4% 

BharatBenz 1217C 

• Original cost (2018): ₹28 lakh 
• Current value: ₹15.8 lakh 
• Depreciation in rupees: ₹12.2 lakh 
• Real-world loss: 43.6% 

Conclusion: 

Trucks aren’t your typical investment – they’ll lose value over time, but smart choices can make a big difference to your bottom line. The key is picking the right truck and taking good care of it. Even though you probably won’t sell it for more than you paid, you can minimize losses

Truck depreciation India Calculation

through proper maintenance. Plus, if you’re using it for business, the returns often go beyond just resale value. 

At the end of the day, success with truck ownership comes down to being realistic and having a solid plan. Keep an eye on what’s happening in the truck market – timing can make or break your purchase and sale decisions. Just remember that every situation is different, and what works for one owner might not work for another. 

Final Thoughts 

If you are new to this field, planning to drive truck yourself, we are suggesting you take a used vehicle. How ever, if you hire a driver for long distance and interstate transportation, better buy a new truck. Ultimately, the choice is yours! Plan wisely!

*Content written on the basis of some real time talks and data available on internet