Originally Posted by
I-Like-To-Bike
Because the car expense is covered by the purchase price, either a loan or cash payment. The value of the car is going down yearly by the depreciation "cost," but the purchaser is not paying out of pocket another dime for depreciation. Count one or the other as the cost of ownership,but not both.
You can buy a sandwich for $5, and depreciate the full amount of $5 in about 5 minutes. Total cost of sandwich is $5, not $10 which you come up with if you count both purchase price and depreciation "cost."
I was counting monthly depreciation costs as "(purchase price - selling price)/months". For a leased or financed car with monthly payments, I would agree that monthly payments are more or less equivalent to depreciation (depending on how good you are at selling a car). However, when you pay cash, I disagree with the statement that "Depreciation costs should not be figured in to the monthly costs of operating a car... period." That's basically assuming that I'm going to sell it for as much as I paid.