The amount a car has depreciated is important in understanding the resale value. It may be overlooked as the highest cost for fleets during ownership. As some models lose value at a higher rate than others.
Taking many aspects of the vehicle including mileage, servicing and general condition determines the residual value. This data does not indicate a selling price, but a rough calculation of what a vehicle is worth.
Fleet management organisations use residual value data as a benchmark for financing a vehicle or for forecasts when analysing fleet vehicles. Auction prices, manufacturers' prices and trends in the market can determine the estimated value of a vehicle.
When budgeting for the financial year, fleet management can identify where the used vehicle market is going and estimate the residual value of the vehicle. This helps work out asset value, tax calculations and depreciation that may affect profits.
Insurers during a claim can view residual values to accurately inform customers of their quoted figure for settling a claim on the vehicle.