Overview
When most people calculate what a trip costs, they only look at the gas gauge. But every mile you drive slowly chips away at the resale value of your vehicle.
Direct Answer
Depreciation matters because every mile can reduce a vehicle's resale value, even though you do not pay that cost at the pump. For newer vehicles, depreciation can be larger than fuel cost per mile.
What this guide covers
The Silent Expense
Unlike gas or insurance, you don't write a check for depreciation every month. It only becomes real when you sell or trade in the car.
However, a newer car can easily lose $3,000 to $5,000 in value per year. When divided by 12,000 miles, that is 25 to 40 cents per mile just in lost value—often more than the cost of fuel.
When to include it
If you are driving for Uber, Lyft, or a delivery service, including depreciation is critical to understanding if you are actually making a profit.
If you are driving a 15-year-old car that has already bottomed out in value, depreciation is minimal and fuel becomes the dominant cost factor.
Limitations and exceptions
- Depreciation varies by vehicle, market demand, mileage, condition, accident history, and local resale values.
- This guide gives planning context and does not predict a guaranteed resale price.
Practical next steps
- Estimate annual depreciation before judging a vehicle by fuel cost alone.
- Use a lower depreciation input for older vehicles that have already lost most of their value.
- Include depreciation when evaluating delivery, rideshare, or any driving tied to income.
FAQ
Frequently asked questions
Should I include depreciation in cost per mile?
Why does depreciation feel invisible?
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