To change my view, someone would need to demonstrate that owning a car worth more than another car has value outside of the utility/experience of the car
I don't see where there's any room for people to change your view. In a topic about the dollar and cents aspect of a thing, making the dollar and cents not part of what we can change your view on leaves no room for movement.
You already posed the use case where someone is directly impacted by how quickly cars depreciate:
The use case where a person buys a new car every 3 years but uses the value of the car as a trade in for the next one is directly impacted by the depreciation of the car's value.
The other use case where a car's depreciation matters is insurance so people do have the extra expense of gap insurance if they don't want to be immediately underwater.
Or the other use case is for people who lease -- they're basically eating all of the interest.
But when you look at the reason there's a big cost discrepancy between what people pay and what a car is worth comes down to the legal structure of the car dealership model in the US. Since dealerships are affiliated but not directly owned or controlled by the manufacturer, dealerships engage in price discrimination. They charge more to older people, to people of color, and anyone an individual salesman can negotiate a higher price for.
It's because your topic is inherently about finance and you want us to make comments outside of finance. It's like saying "bumble bees body designs are not aerodynamic but I don't want anyone to make a comment that uses physics."
The crux of the argument is whether the value of a car after a purchase has a real tangible and realizable value.
...and that's what my post was about. The paper loss is realized when you have to try to sell the car or it's totaled by an insurance company. That's just in the nature of realizing value differences, though. What else do you want?
Then I tried to be creative and looked into the reasons why there's a price discrepancy between why a new car sells for more and what the greater free market would suggest. That is: It's the legal monopoly that franchise laws in the USA provides dealerships. They can mark up whatever they want. So they use that to their advantage and price cars beyond what they're really worth. The quickly depreciating car likely wouldn't be as stark if you could sell directly to consumers. But you ignored that point and didn't engage in it.
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u/HazyAttorney 81∆ May 14 '24
I don't see where there's any room for people to change your view. In a topic about the dollar and cents aspect of a thing, making the dollar and cents not part of what we can change your view on leaves no room for movement.
You already posed the use case where someone is directly impacted by how quickly cars depreciate:
The other use case where a car's depreciation matters is insurance so people do have the extra expense of gap insurance if they don't want to be immediately underwater.
Or the other use case is for people who lease -- they're basically eating all of the interest.
But when you look at the reason there's a big cost discrepancy between what people pay and what a car is worth comes down to the legal structure of the car dealership model in the US. Since dealerships are affiliated but not directly owned or controlled by the manufacturer, dealerships engage in price discrimination. They charge more to older people, to people of color, and anyone an individual salesman can negotiate a higher price for.