There was a question yesterday that generally stated cars lose their value so fast because people don’t know what the previous owner did. That’s fair, but why does that not relate to houses?
In: Economics
Everyone is making the point about the land. Important also to make the point about the car. There is a point in a cars life when it will be worth zero: the cost of reviving an old dead vehicle isn’t worth the cost. Nobody knows exactly when this will be for each car, but people have a general idea in years and in miles traveled when a car will no longer be serviceable or worth it.
Cars usually lose a big chunk of value right away because there is a general preference for new vs. used. There is also an information advantage for the seller where most used buyers need to accept that more lemons are sold used while owners of good cars hang on to them.
Then once they no longer have the luster of being new they typically drift down in value fairly consistently to when they are generally considered end of life. At end of life, working vehicles are worth a couple thousand and non-working vehicles are worthless.
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