Doesn’t factoring depreciation into the cost of car ownership rely on the assumption that you will eventually sell that car? If so, why is that a reasonable assumption?

Question

Recently watched [this video](https://www.youtube.com/watch?v=ztHZj6QNlkM) which puts a significant chunk of the cost of owning the vehicle into depreciation. Wouldn’t the loss in value of the vehicle only matter to me if I bought this car with the intent to sell it in the future? I *could* drive the car until the engine block falls apart and it becomes basically unsellable.

In: 2782

Answer 1

You don’t have to sell the car for depreciation to affect you. You buy a 10k car and run it until it dies (lets say 10 years), that was 1k/year depreciation.

But also generally someone who buys a new car wants to drive a new car and won’t be driving it in 10-15 years when it’s old and potentially unreliable. Also on the other side of things, someone that likes to buy cheap high miler cars will likely buy them and run them until they die. I’d say it’s rare for someone to buy a new/expensive car and run it until it dies.