7 ms·
> car ownership cost $11,783 per year, most of it depreciation Does depreciation even matter. Most people don’t sell their cars.
by philliphaydon 8y ago
> car ownership cost $11,783 per year, most of it depreciation
Does depreciation even matter. Most people don’t sell their cars.
- cyberferret 8y agoI think he may be talking 'accounting' depreciation, which is what accountants would use when calculating the balance sheet asset entries on company cars etc. NB: Can't read the site or full article - not sure if it is the 'HN Hug of Death' but it is timing out for me.
- sdfx 8y agoIn the US the average length of car ownership for new cars is 6.5 years [1], so it does matter what your car is worth after this time. Not sure if it amounts to ca. 6,000 USD per year, tho. That's a lot of depreciation. [1]: https://www.statista.com/statistics/581017/average-length-of-vehicle-ownership-in-the-united-states-by-vehicle-type/ https://www.statista.com/statistics/581017/average-length-of...
- philliphaydon 8y agoOh wow. Ok. I would drive a car till it died. Wouldn’t buy a new one every few years.
- jonknee 8y agoThe type of person who buys a brand new car probably likes a brand new car (new features, status, reliability, etc) and that doesn't change after a handful of years. Or the other way around, the type of person who wants to maintain an older vehicle is probably not the type of person who will buy a brand new car. Obviously there are exceptions, but the used car market is much larger than the new car market so most are selling.
- patio11 8y agoHere, let me rephrase: the expensive part about car ownership is purchasing cars, not gas, insurance, or maintenance.
- anoncoward111 8y agoAgreed, but now that the problem has been identified, why do so many people continue to finance or lease new cars? Car maintenance isn't that scary if you have a steady income and buy something rational (90s japanese instead of 2000s range rover)
- maxerickson 8y agoBecause they don't consider the total costs and $300 a month is "affordable" or whatever.
- zip1234 8y agoI know people that lease just because they want a new car every three years and can afford the $3600/yr for that.
- bronco21016 8y agoI’ve noticed that many of my friends simply accept that leasing for $200-400/mo in perpetuity is simply easier than dealing with a car that begins to become unreliable. Humans are weird in that spending $1,500 on car repairs one time in 24 months just seems way more jarring than spending $300/mo but spending $0 on repairs.
- kd5bjo 8y agoThey’re paying extra to not have their routine interrupted; depending on what else is going on in their life, it may be the right decision. Money is a tool to do things you want, not a scorecard.
- Anderkent 8y agoPeople are risk averse; predictable expenses are easier to plan around than unpredictable ones. What if you're unlucky and it breaks twice in a year? Or the first repair is bungled and you have to go to a different shop, and argue the first one into giving you your money back?
- robinwassen 8y agoNot taking deprecation in account when buying a car makes the calculation way off. It even applies when you own it the whole way from the factory to the junkyard. A rule of thumb that I use is that the value of the car halves every fourth year. So if I buy a car for $20 000 I can count on a monthly cost of $208 for the deprecation the first four years, that exceeds all other costs of ownership in my case.
- dsfyu404ed 8y agoRegardless of age and mileage there's a floor value for a vehicle based on vehicle type, options and condition. In states with annual safety inspection anything in passable condition gets an artificial price bump of about a grand compared to the same vehicle with a cracked tail light, 1/32 less tread or a missing sun visor.
- mavhc 8y agoBuy used, problem solved. Bought a £8k 6 year old car, sold it for £2.5k after it broke and wanted £2k for repairs 6 years later. So £1k/year. Current car costs £0 in tax, £0.02 p/mile, £360 insurance per year
- philliphaydon 8y agoMy mum bought a car in 1992 for ~$16,000 NZD. Still driving it today. It’s a Toyota so maintainence is tiny. My dad still drives my 1998 Mitsubishi. So when I see the price including depreciation it seems odd that people change cars so often they worry about resale value. I would either buy new and drive it into the ground or buy second hand.
- noelwelsh 8y agoThis. Recently bought a car that was about 1 year old, low mileage, and half the cost of new. Why bother buying a new car?
- tadzik_ 8y agoBoth cars I owned were used, but if I had excess money I would probably go for a new car because of how shit the 2nd hand market can be. You never really know what you buy unless you pay a 3rdparty expert to verify that the thing you're buying isn't critically flawed in a non-obvious way.
- mavhc 8y agoBoth mine were bought from dealers used, so less risk, they both had 1 year warranty I think
- CalRobert 8y agoWell sure, cars break after all, and many people will find they need to replace their car instead of living without one. If I buy a washing machine for $600, and it breaks after 5 years, I can consider that machine to have cost me $120 a year, even if I never sell it.
- pc86 8y ago> Most people don’t sell their cars. [Citation needed] Trading your car in is indeed selling your car.