It depends on whether you are using the straight line or declining balance method. In this particular context, the 15-20% rule of thumb for cars does refer to d

It depends on whether you are using the straight line or declining balance method. In this particular context, the 15-20% rule of thumb for cars does refer to declining balance, which does reflect the market value of cars more closely. If it were straight line though, you could just have a predetermined residual value for a specific useful life of the asset, and then depreciate the percentage of the difference from the original value and the residual value each year. You can also easily have depreciation where the residual value is less than the fair market value at the end of the asset's useful life or stated period though. You can never perfectly predict the residual value after all, but that's what capital recovery, or gain on disposal are used to describe.