Depreciation
Depreciation is the reduction in a truck's value over time, and it is a real business cost even though no money leaves the account in the month it accrues.
Last reviewed · by the fleetchart dispatch desk
A truck bought today will be worth less next year regardless of how carefully it is run. Ignoring that in cost calculations makes an owned truck look cheaper to operate than a leased one when the difference may be smaller than it appears.
Accounting depreciation follows tax rules; economic depreciation follows the resale market. For decision-making, the market value matters more.
The distinction that matters operationally is between accounting depreciation and market depreciation. Accounting depreciation follows a schedule set by tax rules; market depreciation is what a buyer will actually pay next year. For a decision — keep the truck or replace it — market value is the relevant number, because it determines the real cost of the miles you are about to run. A truck being depreciated to zero on paper can still be worth a great deal, and the reverse also happens.