Take the 2-minute tour ×  Cars drop in value at different rates,
but every car takes a huge drop in value when it is driven off
the dealer's lot. For many cars there is historical data that
shows approximately how quickly they will decrease in value.
Eventually a car will start breaking down and become more
trouble than it is worth. Therefore some people follow rules of
thumb and buy 3-4 yr old cars with the intention of selling them
when they are 8-9 years old. Is there a method of determining
the optimal age at which to buy a car?  share|improve this
question You need to define a utility function relating the time
value of money, the utility of money, and the utility of using
the car before you can answer this question. Put another way,
many people do not follow follow this rule of thumb because it
is not optimal for them (i.e. they have different preferences).
–  Quant Guy Nov 10 '11 at 15:05 add comment  migrated from
quant.stackexchange.com Nov 10 '11 at 13:53  This question came
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