Programs offered by auto makers to boost sales of less popular models and reduce inventories. Dealers decide whether to pass the savings to customers. Dealer invoice Amount that auto makers charge dealers for vehicles, including options. The Monroney sticker price plus a suggested markup for dealer-installed options. The annual reduction in the value of an asset attributed to normal wear and tear.
Depreciation is based primarily on miles driven.
The greater the miles, the greater the depreciation. Annual depreciation rates for autos are also influenced by vehicle model, maintenance, general consumer demand for the model, and the maker's reputation for quality. Luxury cars retain their value longer and, hence, depeciate more slowly. Depreciation expense is used to calculate the residual value for preparing closed-end leases . Down payment Amount paid by the consumer in cash or trade-in value in order to obtain an auto loan to finance the remainder of the purchase price.