{"id":3030,"date":"2022-03-24T08:00:24","date_gmt":"2022-03-24T13:00:24","guid":{"rendered":"https:\/\/www.usedvending.com\/blog\/?p=3030"},"modified":"2022-03-24T04:18:08","modified_gmt":"2022-03-24T09:18:08","slug":"how-much-do-food-trucks-depreciate","status":"publish","type":"post","link":"https:\/\/www.usedvending.com\/blog\/how-much-do-food-trucks-depreciate\/","title":{"rendered":"How Much Do Food Trucks Depreciate?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">You may not realize it but knowing the value of your entire food truck business is extremely important including whatever appliances, equipment and utensils you own as part of the business. If you\u2019re looking to sell your mobile kitchen, learn how to value your property correctly in order to get the best price ever. How? Look for sellers online that are selling the same brand you have so you can compare prices. Both age and condition of your equipment affect their present market value.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Likewise, your net income, assets and liabilities are other vital determinants of the value of your mobile business. Besides revenues, there are still more factors to consider. Therefore, you need to hire a financial analyst so as to come up with a fair market value of your possessions.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This business evaluation from a professional can result in a highly realistic valuation and you can be assured that there\u2019s going to be \u201cno-strings-attached\u201d involved. In other words, if you were left to do the task on your own, you might not be fair or neutral since it will be emotionally hard on your part to do the valuation yourself.<\/span><\/p>\n<div style=\"border: 3px solid; padding: 10px; width: 100%; border-radius: 25px; border-color: #F4A70F; color: #007bff;\">\n<strong><\/p>\n<p style=\"color: #007bff;\">What&#8217;s Inside<\/p>\n<p><\/strong><\/p>\n<ul>\n<li><a style=\"text-decoration: none;\" href=\"#factors\"> Valuing your Food Truck: 3 Factors to consider<\/a><\/li>\n<ul>\n<li><a style=\"text-decoration: none;\" href=\"#depreciation\"> Depreciation Rate on a Truck<\/a><\/li>\n<li><a style=\"text-decoration: none;\" href=\"#valuation\"> Valuation on your Equipment<\/a><\/li>\n<li><a style=\"text-decoration: none;\" href=\"#rateperyear\"> Depreciation Rates of Equipment Per Year<\/a><\/li>\n<\/ul>\n<\/ul>\n<\/div>\n<p><b><\/b><\/p>\n<h2 id=\"factors\"><b>Valuing your Food Truck: 3 Factors to consider<\/b><\/h2>\n<p><b><\/b><br \/>\n<span style=\"font-weight: 400;\">To ascertain the holistic valuation of your unit, the following are the questions most likely to be asked by your financial professional:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">For how much did you purchase your food truck?<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How much did you spend for the upgrade or renovation on it?<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">What is the depreciated value of your business or its amortization cost?<\/span><\/li>\n<\/ul>\n<p><b><\/b><br \/>\n<span style=\"font-weight: 400;\">Speaking of amortization, it refers to the series of amounts you pay back in order to reduce your loan principal. In essence, your series of loan payments can help you compute the depreciated value of your food truck.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Depreciation is computed for fixed assets so that you can spread out the cost incurred and include the utilization of those assets into its existing market price. In this case, your fixed assets include your vehicle, all your equipment and furniture, if any.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A simple calculation would be:<\/span><\/p>\n<p><span style=\"font-weight: 400;\">$100,000 \u2013 cost of food truck upon purchase<\/span><\/p>\n<p><span style=\"font-weight: 400;\">10 years \u2013 approximate intended use<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Solution: $100,000 divided by 10 = $10,000 per year<\/span><\/p>\n<p><span style=\"font-weight: 400;\">$10,000 x 5 years = $50,000<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This means that after 5 years of use, your business is now roughly valued at $50,000. Why 5 years? This is because the industry standards for depreciation of trucks with an average weight of about 6,000 kgs or 13,000 pounds, is between 5 and 7 years.<\/span><\/p>\n<div class=\"uv-lst\" data-category=\"20\" data-count=\"6\" data-type=\"new\"> <\/div>\n<h3 id=\"depreciation\">Depreciation Rate on a Truck<\/h3>\n<p><b><\/b><br \/>\n<span style=\"font-weight: 400;\">What does it mean when you say truck depreciation? Well, it means a devaluation or the organic decrease in its value over time, taking into account the general wear and tear incurred in between. According to a study in 2018, pickup trucks were found to have the lowest depreciation rates of all vehicle divisions. Its 5-year depreciation is pegged at 41.3% while other classes of vehicles and passenger cars are at 51.9% and SUVs are at 54.1%. Such figures are considered higher depreciation rates.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Truck depreciation is calculated to be from 15% to 25% per year for the first 5 years as a general rule. At the close of 5 years, your vehicle will just be valued at nearly one-third of the amount you have spent on it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">How about semi trucks \u2013 do you think they have value? Of course, they do. As a rule of thumb, semi trucks generally lose most of their value after the first 5 years but in reality, these types of vehicles hold value well in comparison with other classes of vehicles.<\/span><\/p>\n<h3 id=\"valuation\">Valuation on your Equipment<\/h3>\n<p><span style=\"font-weight: 400;\">As we said earlier, all things related to your food truck business are greatly valuable. So, if we already know how to compute the value of the truck itself, it\u2019s equally important to do a valuation on the equipment inside your kitchen-on-the-go. These are the questions to ask yourself in order to come up with some estimated figures:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How much did you spend on the equipment?<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How much did you spend on repairs or upgrades on the equipment?<\/span><\/li>\n<\/ul>\n<p><b><\/b><br \/>\n<span style=\"font-weight: 400;\">Just like how we did the food truck valuation, now let\u2019s amortize the cost of those equipment.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">$10,000 \u2013 equipment cost\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">10 years \u2013 approximate intended use<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Solution: $10,000 divided by 10 = $1,000 per year<\/span><\/p>\n<p><span style=\"font-weight: 400;\">$1,000 x 5 years = $5,000<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This example shows that if you have been using those things for 5 years, their value shall have become $5,000. For the food preparation and serving equipment, the industry standard according to business insiders is 12 years. This means to say that business owners upgrade their equipment every 6 to 8 years based on what the National Restaurant Association in America has observed.<\/span><br \/>\n<b><\/b><\/p>\n<h3 id=\"rateperyear\">Depreciation Rates of Equipment Per Year<\/h3>\n<p><b><\/b><br \/>\n<span style=\"font-weight: 400;\">Different types of equipment vary in their annual depreciation rates. If the food preparation and serving equipment has a life expectancy of 12 years, light trucks weighing below 13,000 pounds have only 4 years while that of heavy trucks and trailers with a weight beyond 13,000 pounds have 6 years. Light and heavy trucks fall under the category of automotive equipment.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now that you\u2019re learning about how food trucks and equipment depreciate, you might be interested in opening up a mobile business. Know where to find reliable used food trucks for sale. Visit <a href=\"https:\/\/www.usedvending.com\/\"><span style=\"font-weight: 400;\">UsedVending<\/span><\/a><span style=\"font-weight: 400;\"> for the widest selection in the US and North America.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>You may not realize it but knowing the value of your entire food truck business is extremely important including whatever appliances, equipment and utensils you own as part of the business. If you\u2019re looking to sell your mobile kitchen, learn how to value your property correctly in order to get [&hellip;]<\/p>\n","protected":false},"author":191,"featured_media":3052,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[4],"tags":[],"class_list":["post-3030","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-food-trucks"],"modified_by":"Titus Asher","_links":{"self":[{"href":"https:\/\/www.usedvending.com\/blog\/wp-json\/wp\/v2\/posts\/3030","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.usedvending.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.usedvending.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.usedvending.com\/blog\/wp-json\/wp\/v2\/users\/191"}],"replies":[{"embeddable":true,"href":"https:\/\/www.usedvending.com\/blog\/wp-json\/wp\/v2\/comments?post=3030"}],"version-history":[{"count":2,"href":"https:\/\/www.usedvending.com\/blog\/wp-json\/wp\/v2\/posts\/3030\/revisions"}],"predecessor-version":[{"id":3054,"href":"https:\/\/www.usedvending.com\/blog\/wp-json\/wp\/v2\/posts\/3030\/revisions\/3054"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.usedvending.com\/blog\/wp-json\/wp\/v2\/media\/3052"}],"wp:attachment":[{"href":"https:\/\/www.usedvending.com\/blog\/wp-json\/wp\/v2\/media?parent=3030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.usedvending.com\/blog\/wp-json\/wp\/v2\/categories?post=3030"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.usedvending.com\/blog\/wp-json\/wp\/v2\/tags?post=3030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}