The Depreciation section in Fleet Finance is used to automatically depreciate a vehicle’s value over time. You enter the vehicle’s starting financial values and a depreciation date range. Once configured, the system applies depreciation once per day at midnight, based on the vehicle's time zone.

Each daily run:

• Subtracts the daily depreciation amount from the Residual Value
• Adds the same amount to Accumulated Depreciation

Stops when either:

• The End Depreciation Date is reached, or
• Residual Value reaches 0 (it will not go below zero)

After the first successful depreciation run, all starting values become read-only (locked).

Step-by-Step: Setting Up Vehicle Depreciation

1. Navigate to the Depreciation Section

Go to Fleet

Open the vehicle using the pencil icon

Select the Fleet Finance tab

2. Enter Starting Values

Fill in the following fields carefully, as they will be locked after depreciation begins.

Acquisition Price

• The amount you paid for the vehicle (your principal)

Residual Value

• The vehicle’s current book value
  • New vehicle: Usually the same as the Acquisition Price
  • Mid-life vehicle: The current book value at the time of onboarding

Accumulated Depreciation

• The total depreciation already taken
  • New vehicle: Typically 0
  • Mid-life vehicle: The depreciation already applied before onboarding
  • Important formula check:

Acquisition Price ≈ Residual Value + Accumulated Depreciation

If these values do not align (especially for mid-life vehicles), the depreciation results will be incorrect immediately.

3. Set Depreciation Dates

• Start Depreciation Date: The first day depreciation should apply
• End Depreciation Date: The final day on which depreciation should apply

4. Select Depreciation Type

• Currently, only the Daily Amount is supported

5. Enter the Depreciation Value

• Enter the daily depreciation amount
• This value will be applied once per day at midnight

6. Save

No values change immediately

At the next midnight (based on the vehicle’s location):

• The system runs depreciation
• All setup fields become locked

How to Calculate the Daily Depreciation Value

If you normally depreciate vehicles monthly, you can convert that rate into a daily amount using the formula below.

Formula

What to Expect After Depreciation Starts

• After the first midnight run:
  • Acquisition Price, Residual Value, Accumulated Depreciation, and dates become read-only
• Each day:
  • Residual Value decreases by the depreciation amount
  • Accumulated Depreciation increases by the same amount
• Depreciation automatically stops when:
  • The End Depreciation Date is reached, or
  • Residual Value reaches 0