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.
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Not necessarily, you can think of depreciation from the aspect of a buyer and it becomes the replacement cost.
You might *want* to drive the car into the ground but what if an elephant stomps on it tomorrow? You need a new car and in theory you have insurance that will cover it’s replacement. But the insurance company doesn’t drive up and park an “Equal” car in your driveway. They will just give you the *value* of the car and wish you good luck. So in theory the depreciated cost is the value it would cost you to re-purchase an “equal” car in this contact.
Point being, if your 10 year old Civic gets destroyed you’re not getting paid out for a new Civic, you’re getting paid out for whatever your Civic was worth at the moment of destruction, in theory, a 10 year old Civic in similar condition.
Similarly, if for whatever reason you are using your car as an asset on a loan, they’ll only “count it” for as much as it’s worth. “any” Civic is not worth as much as a brand new Civic.
Outside of selling, buying, or replacing your car. Yeah, you probably don’t care terribly much about depreciation.
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