7 ms·

Am I the only one who feels like depreciation should of been taken into consideration when he was calculating how much it cost?

• blakes 10y ago
  I think deprecation should only be taken into consideration if one is planning on selling the car in the future, and I get the feeling that he is planning on driving that car into the ground.
  • aardvark291 10y ago
    In which case the value will reach $0. That's called depreciation...
    • roninb 10y ago
      I think the point being made was, if you don't plan on selling something, does it matter what it's worth? As in, I'm not going to factor my child's value into my assets since I'm not going to sell it. Or in the OP's case, since his car will never be sold, it's not relevant how much value he's losing by keeping it for x years. Not that the car's value doesn't depreciate, just that the value of the car isn't ever important after the initial cost.
      • deleted 10y ago
        [deleted]
      • sangnoir 10y ago
        > I think the point being made was, if you don't plan on selling something, does it matter what it's worth Yes, it matters. There are a lot of intangible assets that are not sold (such as Goodwill), even those can be given quantifiable value
        • roninb 10y ago
          Right, but the author was estimating cost over the lifetime of the vehicle, not possible breakeven down the road if they get bored and sell or some other general use-case. In the author's case, is the up front cost they included not enough? I guess maybe you're being pedantic and saying everything's value is always important to make measured decisions, but that seems lame in this discussion so I assume I'm glossing over some fundamental fact.
      • rhino369 10y ago
        Even if you plant to drive it into the ground, you have to spread the cost of the car over the lifetime of it's use. If the Telsa only lasts 9 years, that's is going to add cost to his usage. If it lasts 30 years, that's going to reduce the cost of usage. Otherwise any sort of calculation of expenses is missing one of the biggest components, the cost of the car.
        • femto113 10y ago
          I think 9 years is at the high end. The drive train was replaced at 65K and the battery was replaced at 75K miles which probably makes "into the ground" not much longer than when the 8 year warranty runs out.
        • roninb 10y ago
          > Otherwise any sort of calculation of expenses is missing one of the biggest components, the cost of the car. They include the cost of the car as the first calculation... > Total Cost of Ownership: >> Cost of Tesla: $79,000 used with 35,000 miles Is that not enough? Do you need to calculate the potential earnings every day that you decide not to sell the car over it's lifetime? Also, perhaps this is tangential, but the author was calculating how much they had lost or saved over the course of ownership up to that point. I feel like the OP in this subthread didn't actually read the article and just commented after skimming over the cost breakdown thinking it was supposed to be something it wasn't (i.e., a cost/benefit analysis for the car's lifetime).
    • gist 10y ago
      Also if he is reporting income then he is calculating depreciation (or should be) for tax purposes.
  • to3m 10y ago
    I think the point is that he's spent $79,000 on the car, which appears to be glossed over somewhat when calculating the TCO. What does T stand for, after all? The price of the car absolutely must be included.
• gist 10y ago
  Absolutely agree. Another commenter says "doesn't matter if he's planning to run the car into the ground" but a) we don't know that and b) In theory anything mechanical (or electronic) has a useful life whereby that life is reduced by wear and tear. You could argue that 100 miles is de-minimis but not 100k miles.
• tunap 10y ago
  Depreciation, insurance, commercial operating costs & warranty issues due to non-personal use. Of course, OP did state "earn" which probably means "net", but as stated before, why would a manufacturer or service concede a presumably plausible revenue stream in the first place?
• makomk 10y ago
  Definitely. Unless Tesla are selling their cars for less than cost, he's effectively just paying for the servicing costs upfront.