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Asset is anything that is controlled by an individual which is of economic value, and expected to generate an income or return future benefits. Liability is the other way around, it is a claim against the assets. Liabilities are financial drawback, basically anything that causes you something but doesn’t return any profit or benefit like an asset.
Most cars are depreciating assets, in that the longer you own them the less they are worth.
Even after a car’s price is paid is full, it will remain a liability since it takes in more money inform of insurance, maintenance, gas— than it gives , in reality. For the purposes of accounting on balance sheets, they are a depreciating asset.
It would be similar if the vehicle is a taxi, for rent, or is a source of income in which case it is still a depreciating asset but its revenue and cost of ownership or operation are captured on the balance sheet.
A car is always a liability, but sometimes can be a necessity. A car is a liability because it makes you spend money rather than gain it. Car insurance, maintenance costs and sometimes loans don’t grow your assets. They diminish them. That’s why a car is always a liability. A car, nevertheless, can be a necessity. If there’s no other way to do your job, then the purchase of a car can be justified. A car is a necessity for disabled people. A car isn’t a necessity when public transportation is available and it’s possible to commute on a bicycle or by foot.