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Depreciation magic number...

Discussion in 'Vehicles' started by Geno71, Jan 3, 2017.

  1. Geno71

    Geno71 Well-Known Member

    Location:
    Pittsburgh PA
    Hey guys,

    So while watching a video from UberMan he mentioned something interesting, he says "Don't subsidize the instant cash from Uber with your car's value..."

    I did figure the maintenance thing that works for me, I just put away extra money for taxes and maintenance, but as we all know, depreciation is harder to figure out, so here is what I did and I want to see if it makes sense to you guys.

    I have a 2009 Toyota Rav4 Limited
    I went to KBB and found my car with all the same options and condition and entered my current 78000 miles, (that's a Trade In estimate):
    78000 - I got a price range of $9228-10683, then I added 1000 miles and got it updates...
    79000 - $9190-10645, I kept adding 1000 miles every time...
    80000 - $9152-10607
    81000 - $9114-10569 and so on, I did that for about 15,ooo miles and I see that on average every 1000 miles my car's low and high value decreases by around $38.

    I did the same thing with Private Buyer estimate and the price range starts from $11979 and it decreases the same $38 for every 1000 miles I add.

    With that said, is it a reasonable assumption that in my case, I lose $38 in my car's value every 1000 miles I drive (not including maintenance costs)?

    That of course just an additional expense in an endless pile of things that we have to keep in mind when trying to decide if driving for Uber or Lyft is worth it.
     
    Michael - Cleveland likes this.
  2. Mears Troll Number 4

    Mears Troll Number 4 Well-Known Member

    Location:
    Orlando-ish
    Driving:
    Taxi
    You actual sell value will be reasonably reduced by every piece of required work that needs to be done when you go to sell the car, and having a lousy interior will knock out your cars value by an insane amount. IE if you get a car towed to the shop and you need a new transmission and suspension, the value of the car can get reduced by the cost of the new transmission and suspension, putting your car at a very very low value.

    The last car i sold that i used in the for-hire business... it needed 3 times as much work as it was going to be worth ($6,000) the dealership said i might get $2,000 at auction after getting the work done. I could have lost another $4,000 worth of value if the car was worth $4,000 more than it was. At that point i had enough of the 60 hour weeks and knew that I had made enough off the car.
     
  3. Clifford Chong

    Clifford Chong Well-Known Member

    Location:
    United States
    Driving:
    UberX
    Putting it this way.

    I buy a $20,000 car.

    I work for 9 months full time and end up with about $27,000 (3000 ea month) with about 7,000 spent on maintenance, gas, depreciation, etc. all resulting from ridesharing. I keep the $20,000, which amounts to the whole value of the car. Basically, what I have made after working 9 months is a car that has been used for ridesharing for 9 months. I'd say a car with a high residual value will be worth atleast 15,000. So the new revenue would be around $1,600 per month
    which is not that good for a full-time work I would say. This also doesn't account for personal expenses, meaning it could take even longer to make back the money you spent on that car. Terrible investment
     
    Last edited: Jan 4, 2017
    Shangsta and Michael - Cleveland like this.
  4. Michael - Cleveland

    Michael - Cleveland Moderator Moderator

    Location:
    Great Lakes
    Driving:
    UberSELECT
    Good starting point - but don't forget that while your car's real value is depreciating at a rate of $0.038/mile driven, you are also able to to take the IRS std business mileage expense deduction of $0.54/mi from your tax liability - which is much more than your actual expenses on that Prius, even including the real-world depreciation of its value.
     
  5. wk1102

    wk1102 Well-Known Member

    Location:
    treasure coast fl
    The good thing here is the mileage is only stored in a chip in odometer, no where else. Swap the the odo and .... Granted this is a Felony if done to defraud but....
     
    Adieu likes this.

  6. Michael - Cleveland

    Michael - Cleveland Moderator Moderator

    Location:
    Great Lakes
    Driving:
    UberSELECT
    hehe... unless you count the state DMV and all service records associated with the VIN.
     
  7. Adieu

    Adieu Well-Known Member

    Location:
    OC
    Driving:
    UberXL
    Service is for pansies
     
  8. wk1102

    wk1102 Well-Known Member

    Location:
    treasure coast fl
    Yeah the only record of my car was title transfer... which I filled in the mileage
     
  9. Michael - Cleveland

    Michael - Cleveland Moderator Moderator

    Location:
    Great Lakes
    Driving:
    UberSELECT
    yeah - run a car fax on your car and watch the numbers pop-up.
     
  10. wk1102

    wk1102 Well-Known Member

    Location:
    treasure coast fl
    I did... that is how I know. there was a service call at 20k and the title transfer.

    My transmission has a 10 year 120k warranty.

    I did my homework.
     
  11. Michael - Cleveland

    Michael - Cleveland Moderator Moderator

    Location:
    Great Lakes
    Driving:
    UberSELECT
    I don't doubt it - or you.
    I just know that every time I buy a car I run a VIN report and it always shows DMV records (title transfers) with mileage - and I run the VIN through the dealer systems to check for maintenance, repair and recall work. I guess if I didn't see numbers that made sense, I wouldn't buy the car. (And I personally wouldn't commit a felony by falsifying a title with incorrect mileage reporting).
     
    wk1102 likes this.
  12. wk1102

    wk1102 Well-Known Member

    Location:
    treasure coast fl
    I'm not saying I altered anything... I'm just sayin...
     
    Michael - Cleveland likes this.

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