Cars. Cars are stupidly called an asset, and I guess they retain some value, but not really. It loses 50% of it’s value the second you drive it off a lot and continues depreciating the longer you own it. It requires maintenance and gas, tags, insurance. It’s a liability. If you need one, then purchase it knowing that you are purchasing an item. A car is never an investment.
Generally true, but sometimes you get lucky: I bought a fully loaded Camry in mid 2021, heavily discounted, because it was one of the last previous year model cars they had in the country and at 0% apr for the duration of the 3 year loan. This was right before shortages started and inflation skyrocketed. As a result its value on the used market stayed over what I paid for 3 years and even now it’s lost only about 10-15% of the purchase price.
Yeah I thought about adding that in, but then people think “Like my car!” Pretty much only if you’re buying a literal junker knowing you’re going to refurbish and rebuild the entire thing into mint condition - and you know it’s a high value car, then you’ll probably make a profit. (Even then though, what’s the value of the time and money there)
I think it’s fine to own, but not as an asset but more of a cost to drive. “I am paying $30k (plus interest) to be able to drive for the next 10 years”. To me, that is a realistic expectation
Cars. Cars are stupidly called an asset, and I guess they retain some value, but not really. It loses 50% of it’s value the second you drive it off a lot and continues depreciating the longer you own it. It requires maintenance and gas, tags, insurance. It’s a liability. If you need one, then purchase it knowing that you are purchasing an item. A car is never an investment.
Bruh I wished cars lost 50% of their value when they drove off the lot. Have you tried to buy a used car recently?
Generally true, but sometimes you get lucky: I bought a fully loaded Camry in mid 2021, heavily discounted, because it was one of the last previous year model cars they had in the country and at 0% apr for the duration of the 3 year loan. This was right before shortages started and inflation skyrocketed. As a result its value on the used market stayed over what I paid for 3 years and even now it’s lost only about 10-15% of the purchase price.
Still lost value though. Investments and assets can gain or lose value. Cars only lose value.
Most cars only lose value.
A very tiny minority of mostly exotics become collectors items and are worth many times their original value, even after considering inflation.
Yeah I thought about adding that in, but then people think “Like my car!” Pretty much only if you’re buying a literal junker knowing you’re going to refurbish and rebuild the entire thing into mint condition - and you know it’s a high value car, then you’ll probably make a profit. (Even then though, what’s the value of the time and money there)
100% true for the kind of cars you buy to drive.
Assets and investments are not the same. End thread
And I argue that they should be considered neither
Is your argument that an asset doesn’t (or shouldn’t) depreciate?
My argument is that something that only depreciates shouldn’t be considered an asset
This is my logic too. I own my house but have been leasing a new car every year for over ten years now.
I was kind of skeptical at first but for now I think it works out for us.
I think it’s fine to own, but not as an asset but more of a cost to drive. “I am paying $30k (plus interest) to be able to drive for the next 10 years”. To me, that is a realistic expectation