Residual Value
Quick definition
Residual value is the estimated amount a vehicle will be worth at the end of a set period.
Full definition
Residual value is a vehicle’s expected resale price at a future date. In a FAVR program, employers estimate what the standard vehicle will be worth after its retention period and projected mileage.
For example, if the standard vehicle costs $40,000 and has an estimated residual value of $20,000, the projected depreciation over that period is $20,000.
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