Definition: Depreciation is the decrease in value due to wear and tear or decline in price. Nearly all bought merchandise depreciates. Only highly sought after items and antiques actually increase in value. Unfortunately most vehicles on the road are depreciating a little more each and every day.
Also Known As: Decrease, Decline, Reduction
Examples:
Two identical vehicles, one taken care of meticulously and another abused by a busy family of four can have different amounts of depreciation. The meticulously cared for vehicle may have low miles and not a scratch on it, while the family car has high mileage and a tear in the back seat. The wear and tear on the latter vehicle will affect the overall value or rate of depreciation.
