What is the largest cost to owning a new car, not including the actual price paid for the car?

Question

BlackTom AI · Accepted Answer

The question asks for the largest cost of owning a new car, excluding the actual purchase price. Because the purchase price is excluded, we must consider ongoing costs incurred during ownership.

Depreciation is typically the largest expense for a new car over the first few years. A new vehicle can lose a substantial portion of its value as soon as it leaves the showroom and continues to drop in value with mileage, wear, and model-year aging. This loss in resale value accumulates each year and often dwarfs other ongoing costs like insurance, fuel, maintenance, and financing interest over the same period.

To illustrate: a new car might depreciate by several thousand dollars in the first year alone, and then continue at a slower but still sizable pace in subsequent years. In contrast, annual fuel costs are bounded by usage, insurance premiums tend to be relatively stable year to year, and maintenance costs rise more gradually unless there are major mechanical issues.

Here, the largest cost category—depreciation—dominates over the lifetime ownership period when the purchase price is not counted, because the car’s market value declines regardless of how much you drive or how little you fix.

Notably, the provided information about answer options is missing in this item; without the listed choices, we cannot analyze each distractor. However, given the standard framing of this question, depreciation is commonly identified as the primary ownership cost after excluding the upfront price.

MGT 012Y 001 SQ 2025 Week 5 HW - Cars

What is the largest cost to owning a new car, not including the actual price paid for the car?

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