Quote:
Originally Posted by GGG
How is depreciation irrelevant? It is roughly 50% of the cost of ownership. I agree with you that depreciation is ridiculous therefore most things should be bought used.
Fair enough on the numbers I was basing it on your depreciation included in your post missing that trucks are a lower depreciation category. The first year cost of ownership for depreciation then is about 10k vs 6k
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Yes true, however when comparing financing new vs used, the truck that you bought new is going to have a higher value 5 years later than that now 7 year old truck that you bought as a 2 year old used truck. Once year 4 rolls around trucks we use $3500/ year of depreciation, so the 7 year old truck value is about $7000 less. And yet you've paid equal payments over that time, so what it boils down to is "would you rather pay that money in interest to the banks, it put it towards yourself driving a brand new vehicle which is going to be covered under full warranty?"
I know that for a lot of people, given nearly everyone finances, it does make sense to go this way. Many customers lean towards a year or two old used vehicle thinking they are saving money, but unless they are paying cash, they really need to do the math. This also assumes there is $0 depreciation on used vehicles which is not the case either, you are still going to lose $4000 when you drive that used $37000 truck off of the lot.