Why isn’t it treated similarly to a house?
In: 111
New cars generally come with the specific options the buyer wanted and was willing to pay a premium for. Used cars don’t. Also, cars don’t last long compared to houses, and that longevity changes dramatically with how the owner drives and maintains them – things that are difficult to verify.
New houses also depreciate vs used houses because whoever had it built usually doesn’t want the same things as the next guy. Why pay full price not to get what you want? BUT, since houses aren’t typically thrown away every 5-15 years, they have less availability and are typically better maintained than cars, so don’t suffer as much depreciation. Lastly, many homeowners add value-increasing things to their houses like sheds, finished basements, solar panels, landscaping, trees, new cabinets, etc vs. most car modifications adding 0 value to most owners, or even actively decreasing the value.
tl;dr: It’s much easier to get a new car than a new house, and cars are not as long-lived, so cars depreciate faster. The average house in the USA is 46 years old, but the average car is only 12 years old.
Latest Answers