Lesson 8
The Sunk Cost Fallacy
Keep money you can’t get back from steering a repair-or-replace choice, while still counting what it bought and what switching would cost.
Builds on
The clutch you’ve just paid for
“I put a £1,100 clutch in this car in March. Now it needs £850 of welding to pass its MOT. I can’t scrap it after all that.”
It’s one of the commonest sentences on British driveways. The decision in front of you now is between two futures: pay for the welding and keep the car, or sell it as it is, which a trader puts at about £700, and put the money towards another. The £1,100 has gone either way. Whichever road you take from here, you don’t get it back.