Fleet News

Residual values explained

The residual value is the definition given for the value of the vehicle at the end of the term. Depreciation varies from vehicle to vehicle and is likely to be the largest cost component of running a vehicle for any fleet. 

Market analysts usually publish residual values forecasts by the time a new vehicle is launched, but just taking percentages at face value fails to examine the whole picture when mileage and the working environment can effect the rate of depreciation.

The residual value is how much the car is worth but not the selling price, it provides a benchmark when you come to remarket your company’s fleet vehicles. There is certain information we can use to estimate a vehicle’s residual value, such as information from vehicle manufacturers, auction prices and historical residual data for vehicles. But it ultimately comes down to how much a used car buyer is prepared to pay for it.

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