Question: Should I consider my vehicle an asset or an expense?
An “asset is an economic resource. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset.”
Short Answer: Vehicles are not assets they are expenses that depreciate and require regular maintenance which costs money (resources) to maintain.
Long Answer: This is an important concept to realize as people are often mistaken thinking that the vehicle they are purchasing is an appreciative asset, when rather it is an expense. No matter they type, make, and model of the vehicle it will most like always depreciate year-to-year and you have to pay regular maintenance (oil, fluids, brakes, tires, etc) to keep it running let alone the cost of gas. This on-top of the fact that your biggest decline in value occurs in the first year of ownership (as soon as you drive it off the lot) possess a large risk (if it was considered an “investment”).
Why is this important? Because when you think about your household assets you need to make sure you put your vehicle in the expense category and not the assets. You will need to budget for a replacement in the future and will need to make sure you consider if you should buy used or new. I will not get into the details of the used vs. new car purchasing decision as it has already been covered in depth a lot of other places. However, this decision will be a consideration into your long-term planning for personal investment.
NOTE: Just as you should always research what advice a financial advisor gives you a car dealership is always number one on my list of things to double check.