How Much Does a Caravan Actually Depreciate?

The Short Answer: Steep, Then It Settles

A typical Australian caravan loses around 10-15% of its value in the first year, another 5-8% a year through years two to five, then settles into low single digits. By year ten, many vans change hands at roughly half their new price - sometimes better, sometimes worse.

Two honesty notes before anything else. First, these are typical ranges, not promises - nobody can tell you what your exact van will be worth in five years, and anyone quoting a precise percentage is guessing with more confidence than the data supports. Second, depreciation isn't linear or guaranteed to be gentle: a badly stored van can lose value much faster, while a well-kept van from a brand with a strong resale reputation can beat every number on this page.

The shape of the curve, though, is consistent: the steepest drop happens in the first year or two. The moment a van is registered it becomes "used", and the next buyer can no longer choose their own layout, colours and options - so they expect a discount for that, on top of normal wear. After the early plunge, the rate slows, because a five-year-old van and a seven-year-old van are much more alike than a new van and a two-year-old one.

What That Means in Real Dollars

Percentages hide the pain, so let's use real prices. We track verified manufacturer "from" prices for 660+ Australian caravan ranges - here are the current medians, and what a typical 10-15% first year would strip off each.

Sit with that middle column for a second. A median $83,995 semi off-road van shedding ~12% in year one is roughly $10,079 gone - more than most people's entire annual travel budget, lost before the first service is due. It's the biggest single cost of the first year of ownership, and it never appears on an invoice.

Depreciation sits alongside the bills that do arrive in our guide to what a caravan costs to run.

Estimate It Yourself

Punch in what a van cost new (we've prefilled the current median semi off-road price) and slide the age. You get a band rather than a single number, because that is the honest level of precision a rule of thumb can offer.

What Slows Depreciation - and What Torches It

The bands above are wide because owners have real influence over which end of them they land on. These are the factors that consistently move the needle.

The Flip Side: Depreciation Is the Used Buyer's Best Friend

Every dollar in that year-one column is a dollar someone else can pay for you. Buy a well-kept van at 3-5 years old and the first owner has absorbed the steepest part of the curve - you buy in where it flattens out.

By that age the teething problems have usually been found and fixed under warranty, the van often comes with thousands of dollars of accessories thrown in, and your own depreciation from that point runs at the gentle end of the curve. The trade-off is that you inherit the previous owner's treatment of the van - which is exactly why the inspection matters more than the price.

The ATO Angle: When Depreciation Becomes a Deduction

First, the part that disappoints most people: if your caravan is purely for holidays, none of this is deductible. Depreciation only becomes a tax deduction when the van is used to produce income - renting it out on a Camplify-style peer-to-peer platform, or genuine business use. Private family trips don't count, no matter how far you tow it.

For income-producing use, the ATO's effective life tables list "caravans and camper trailers" at 12 years (under rental and hiring services), which works out to a depreciation rate of 16.67% a year on the diminishing value method or 8.33% on prime cost. The tables are republished most years - the entry sits in the schedule to the ATO's effective life ruling, currently the effective life of depreciating assets ruling on the ATO Legal Database - so confirm the current-year figure before you lodge.

• Apportionment applies. Say you rent the van out 40 weeks a year and use it yourself for 8. You can only claim the income-producing share of the depreciation (and interest, insurance and repairs).
• Tax life ≠ market life. The ATO's 12-year effective life is a formula for spreading the cost in your tax return. It has nothing to do with what the van actually sells for - the market curve earlier in this guide is a separate thing entirely.
• Instant write-off rules come and go. Small business asset write-off thresholds change with nearly every federal budget - whatever figure you read somewhere, check it's current before relying on it.

Depreciation vs Your Loan: The Upside-Down Trap

Depreciation becomes a real financial risk when the van's value falls faster than the loan balance does.

In the early years of a long loan, most of each repayment is interest, so the balance barely moves - while the van is in its steepest depreciation phase. A long term (or a big balloon payment at the end) makes this worse: it's entirely possible to owe more than the van is worth for several years. That's called being upside-down, and it's fine right up until life forces a sale - divorce, illness, a job move - and you have to write a cheque just to hand the keys over. Comprehensive insurance pays out market value or agreed value rather than your loan balance, so a write-off can leave the same gap.

• Shorter terms hurt monthly and help overall. The faster the balance falls, the sooner you're right-side-up.
• Balloons defer the problem, they don't solve it. A balloon keeps repayments low by keeping the balance high - on an asset that's falling in value the whole time.
• A deposit roughly the size of year-one depreciation means you're unlikely to ever be upside-down. The table in section 2 tells you what that number looks like for a typical van.

Run your own numbers in the finance calculator →