Buying a car to let; if it makes 11% p.a but depreciation is 30%, isn't that a loss?
New cars depreciate at 20-30% in the first year. Has this been entered into the equation?
- Anonymous7 years agoFavourite answer
Work it out - assume the car costs £10,000, you make 11% of that per year, and depreciation is 30%
After 1 year - car value - £7,000, income £1,100, total £8,100
After 2 years - car value - £4,900, income £2,200, total £7,100
After 3 years - car value - £3,430, income £3,300, total £6,730
After 4 years - car value - £2,401, income £4,400, total £6,801
After 5 years - car value - £1,681, income £5,500, total £7,181
I really can see any way you are going to make a profit out of that.
- wg0zLv 77 years ago
if 11% is supposed to be the overall return, then depreciation is supopsedly already counted.