Car Depreciation Costs You More Than Gas

Really. Your car will cost you about $4000 a year for depreciation over 5 years. Even at $3 a gallon, you'll only spend about $1800 a year for gas.

Look at used car prices and you'll find that a typical car loses about 65 percent of its value over five years. That means a $30,000 car will bring you $10,500 if you sell it after five years. So in round numbers you've lost $20,000 to depreciation over 5 years, or $4000 a year.

If your car will go 20 miles on a gallon of gas and you drive a typical 12,000 miles a year you'll burn 600 gallons a year. At $3.00 a gallon thats $1800 a year for gas.

So why do people sit in long lines to save 15¢ a gallon, or $3 on a tank full of gas? They should be worried about buying a car that doesn't depreciate much.


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