You can minimize the average annual depreciation on your car by
A)trading the old car each year for a new model.
B)trading in the old car every three years for a new model.
C)extending the holding period.
D)choosing the loan with the lowest APR.

Question

Quizplus · Accepted Answer

The longer you hold onto your car, the more time you give it to depreciate in value. When you extend your holding period, you can spread out the depreciation over a longer period of time, reducing the average annual depreciation. Trading in your car for a new model each year or every three years will result in a higher average annual depreciation as you are constantly taking a hit on the car's value due to depreciation. Choosing the loan with the lowest APR may help you save money on interest, but it will not have an impact on the car's depreciation.

You Can Minimize the Average Annual Depreciation on Your Car