What does the term "depreciation" refer to?

The term "depreciation" specifically refers to the decrease in value of a vehicle over time. As a vehicle ages and accumulates mileage, its market value typically diminishes due to factors such as wear and tear, advancements in technology, and shifts in consumer preferences. This loss in value is an important consideration for both buyers and sellers in the automotive market, as it affects resale value and ownership costs.

Understanding depreciation is crucial for those involved in vehicle sales, as it helps inform pricing strategies, trade-in values, and the overall financial implications of purchasing a vehicle. While the other options relate to vehicle ownership and costs, they do not accurately capture what depreciation entails.