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 can use something after it’s fully depreciated, so no depreciation does not assume sale. The point of depreciation is spread out capital cost over the lifetime of the asset, instead of “expensing” it 100% immediately.

That being said, depreciation is an accounting concept. You can rationalize the purchase however the hell you want