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Depreciation

Discussion in 'Advice' started by FinerThings, Aug 12, 2018.

  1. I'm trying to figure out how much it costs me to use my car for ride sharing. I have a 2017 Honda CR-V LX. I put about 5000 miles a year on it myself, not sure how many I will put on it for ride sharing. Maybe 1000 miles a month. Any idea how to figure this? My car is paid off and insurance is about $60 a month. It's still under warranty so I don't have much maintenance to pay for yet.
     
    tohunt4me likes this.
  2. 911 Guy

    911 Guy

    Location:
    30028
    Track your actual mileage for taxes. Any maintenance as well.
     
  3. SuzeCB

    SuzeCB

    Location:
    NJ
    Driving:
    UberX
    Kbb.com
     
  4. SEAL Team 5

    SEAL Team 5

    Location:
    Phoenix
    Driving:
    Livery
    In San Diego you'll most likely put on 2 miles for every dollar you earn. ie if you want to earn $1000/month then you'll most likely put 2000 miles a month on your vehicle.
     
    tohunt4me likes this.
  5. Trafficat

    Trafficat Moderator

    Location:
    Reno, NV
    A 2017 model will have a lot of depreciation. That's what I like about driving a 2007 model!
     
  6. reg barclay

    reg barclay Moderator

    Location:
    rockland/westchester NY, new jersey
    Driving:
    UberX
    This is basically how I do it. Just look up it's value now, then it's projected blue book value after however many years/miles you plan to drive it. I did this calculation a few days ago on another thread, to compare two models. As I was comparing new models, I just used the MSRP as the start out value.

    2018 Grand Cherokee MSRP = from $30,895
    2018 Corolla MSRP = from 18,700
    Blue Book trade in value for 8 year old base level Grand Cherokee w/100k miles, in 'good' condition = $5947
    Blue Book trade in value for similar level Corolla = $3715

    So the Cherokee's value fell by $24,948, while the Corolla fell by $14,985, with the same amount of time/driving.

    Obviously these numbers are only estimates, but it gives us an idea of the long term cost difference.

    Now if someone's driving the more expensive vehicle for themselves, that's their choice how they spend their money, but if they're using it to ferry pax around, they're basically spending that cost difference on the pax.

    On the other hand, the 2007 will generally have higher repair/maintenance costs. I'm not saying these outweigh the depreciation difference, just making the point.
     
    SuzeCB likes this.
  7. Christinebitg

    Christinebitg

    Location:
    Houston
    Driving:
    UberX
    I did this exercise for years before I ever started driving for Uber.

    Estimate how much your next car will cost you. Don't worry about being exact, just a wild-assed guess.

    Guess at how many miles you'll put on your car between now and when you buy the next one.

    Divide a. by b. to get replacement cost per mile.

    For years, I set aside money for my next car purchase this way. As I upgraded to nicer cars, I jacked up the per mile figure.

    And if you want to (which I did) you can add in some maintenance cost along the way. I spent from my replacement fund when I paid for maintenance.

    When the fund stops going up, you know your maintenance costs are too high, and it's time to replace the car.

    Too detailed? So sue me, I have an MBA.

    Christine
     
    MadTownUberD and Uberingen like this.
  8. Your car is going to depreciate rapidly whether you drive it or park it in a garage. For a reliable car like a Honda or a Toyota the additional depreciation when you put 15k per year vs. 5k per year should be minimal.
     
  9. Atom guy

    Atom guy

    Location:
    CT
    1000 miles a month is pretty low for Ubering - very part time. I do 4000 a month working full time. If you really only did 1000 miles a month, then you are driving barely more than the national average per year, so your depreciation won't be that bad. But you wouldn't be making much money, either.
     
  10. SuzeCB

    SuzeCB

    Location:
    NJ
    Driving:
    UberX
    KBB is good to use because it also takes into consideration where your car is. Different vehicles will be in different levels of demand in different places. A convertible isn't going to be in extraordinarily high demand in the northern-most regions of Alaska. It would make sense that the pricing for it would be higher in southern California. The level of depreciation would be slower in CA too, because the weather conditions take less of a toll.
     
    reg barclay likes this.
  11. oldfart

    oldfart

    Location:
    Fort Myers
    Driving:
    UberXL

    Exactly right

    How much your present car depreciates in value is an interesting number but what I would call a “who cares”. The important number is what will the replacement car cost and the important thing is to be prepared with the money to buy that new car

    My plan is to replace what I have in 2 more years with a $40000 vehicle so I have to put aside about $400 a week for the next 100 weeks.
     
    Christinebitg and MadTownUberD like this.
  12. Bbonez

    Bbonez

    Location:
    USA
    Kbb or nada can give you an estimated value of a vehicle in today's market. There is no way anyone can tell you what a car will be worth in the future.
     
  13. reg barclay

    reg barclay Moderator

    Location:
    rockland/westchester NY, new jersey
    Driving:
    UberX
    Granted, but say you're buying a new car, you plan to sell it in 7 years with 150k miles on the clock, and want to know how much it will be worth. Checking the current worth of a 7 year old car, same model and miles, should give you some idea.
     
  14. oldfart

    oldfart

    Location:
    Fort Myers
    Driving:
    UberXL

    the way I drive i can predict with som accuracy future value will be zero,, I dont know when that might be, but Im preparing for 2 years
     
    SuzeCB likes this.
  15. Bbonez

    Bbonez

    Location:
    USA
    I doubt it will be zero. At today's LOW scrap prices most cars are still worth $100 in scrap metal. But with the new tax on foreign steel that price may triple in 2 years and your car will be worth $300.

    Or you might get real lucky, and have your state vote in a bunch of idiots like CA and have a cash for clunkers program like we did in 2009, they were giving $4500 for worthless cars.
     
    Last edited: Aug 13, 2018
  16. oldfart

    oldfart

    Location:
    Fort Myers
    Driving:
    UberXL

    $300 isnt going to make a difference in my back of the envelope figuring.. Im saving $40000 over 2 years or $400 a week... If I get $300 for my used POS I can buy that new car in 23 months instear of 24.... Dosent change what Im saving each week
     
  17. They're are online calculators to help you determine your costs per mile.

    I know when I first started coming to upnet, I read a post with lots of information about cpm & links to online calculators.
     
  18. Oscar Levant

    Oscar Levant

    Driving:
    UberX
    Why bother, just take the standard deduction and it's very generous, probably the deduction is better than itemizing ( you are asking this for taxes, right? ).
     
  19. KenLV

    KenLV

    Location:
    Las Vegas
    If you're taking the standard mileage deduction, you can't also write of maintenance/fuel/repairs/etc...it's already included.
    No need for fuel receipts, oil change receipts, repair bills, etc...
    Just keep a mileage log.
    Good free apps out there too - like TripLog and Everlance.
    With the write-off now at 54.5 cents/mile it's the best option for the vast majority of RS drivers.
     
  20. Be careful relying on apps to track your mileage - the IRS requires a log with odometer readings & many mileage apps only give you the mileage, not the odometer numbers.

    For your taxes, you can deduct all mileage you are available for uber/lyft - not just when you have a passenger, but when you are looking for one as well.

    However - your deductible mileage is VERY different than your actual costs per mile.

    The problem with most of the calculators out there is they rely on you to estimate repair costs. This is difficult to know & we tend to seriously under estimate it.

    Every mile you drive uses a bit of your tires, brakes, transmission, fuel pump...

    You can calculate this by getting an estimate of how much each repair is and then dividing that by the expected miles before repairing again.

    Tracking your actual repair costs will help you with the accuracy of your estimated repair costs and help you be more realistic about your costs per mile.

    Also, keep in mind wear and tear WILL be more than if you weren't driving for money. Your seats have way more than typical butts sliding over them, your doors see more opening and closing, the weight of multiple adults in a car is harder on your shocks/suspension/struts compared to typical family use.

    So, you have to be aware that a car used for uber for 50000 miles will have more depreciation than a car used for personal use with the same mileage.

    Many people look at their earnings per hour - this isn't really a concern of mine. I want to make sure I'm profiting from each ride. If I don't know my cpm, I have no idea if I'm making a profit.

    Say my cpm is 0.30/mile. I drove 150 total miles and earned $125. Now I calculate any profit: 125 - (150 * 0.30) = $80

    Using my profit, I can then calculate my $/hr. If it took me 8hrs to earn that $125 (which is only $80 profit), then I'm making $10/hr.

    The wise thing to do is to set aside your costs every time you are paid till you have enough money to replace your vehicle. So with the above example - your $80 profit goes on your checking account and then $45 in car costs goes into a separate auto fund so you can fix/replace your car when needed.

    Very few people probably really do this.
     

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