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Is vehicle depreciation a real cost to be considered if you never planned on selling your car?

Merc7186

Well-Known Member
For tax purposes, depreciation is a real thing. But once you have fully depreciated your vehicle and your resale value is less than $3000 (IMO) then I dont consider it a real cost anymore.

I have people play devils advocate to my thinking all of the time and they are entitled to their opinion. In my situation, I bought a $5000 minivan, put in a $800 radio and $1850 in repairs so far. Since I purchased said van for doing Uber, I have made almost $30000. The Beast owes me nothing to this point and everyday I keep it running is all white meat....

I consider $5/hr for my gas, repairs, insurance as my depreciation.
 

Coachman

Well-Known Member
An asset is an asset whether you have plans to sell it or not. While you may not now intend to sell the vehicle, it could be damaged or lost. In that case the value would be important.
 

Mordred

Active Member
  • Thread Starter Thread Starter
  • #5
An asset is an asset whether you have plans to sell it or not. While you may not now intend to sell the vehicle, it could be damaged or lost. In that case the value would be important.
Exactly. So unlike taxes, gas, and repairs, it's a potential cost. But not necessarily a cost. If none of that happens and you keep your car, it's monetary value means nothing.
 

doyousensehumor

Well-Known Member
What is a very long time? Let's say it is 10 years. You buy the vehicle for $10,000. And let's just say there's five hundred thousand miles on it. If it still runs and has cold AC you might get $1,000 for it. It still has depreciation.
 

Christinebitg

Well-Known Member
I plan on fixing my car and keeping it for a very long time.. Seems kinda like considering the value of my half eaten cheeseburger. It doesn't matter I have no plans on selling it.
Okay, so here's how I view this. There are two separate issues involved:

- Your cost
- Your tax return

If you keep the car until it's worthless... Let's you assume, say, 10 years time. In 10 years, you'll have to buy another one. That's a real cost. And it's *different* from the outcome if you didn't drive for U/L. If you didn't, you'd probably be able to keep your car longer, and so your cost of ownership per year is lower. (For example, you might keep your car for 15 years instead.)

This is a real possibility. I bought a brand new Toyota in 1985 and sold it to a dealer when I bought the next one in 2002.

The other issue is taxes. The 54.5c per mile figure from the IRS is just to make doing your tax return easier. That's all it is.

You just keep a good mileage log, and they give you the option of using their figure, rather than trying to figure out exactly how much you paid for maintenance, and precisely how much of the usable value of the car had been used up.

Don't confuse the two issues.
 

doyousensehumor

Well-Known Member
The best way to do this gig is to have a car that’s 2-3 years newer than the minimum year allowed on the platform. Depreciation is not a big factor when you do it this way.
Golden. This is the way to do it!!!

My market is 16 years. You can get a 12 year old car $3000. Craigslist. There are a lot of 4cyl Fusions and Pontiac G6 in that price range. I know someone who just got a 2008 Prius $2900. Good for 5 years. (Assuming they dont change year requirements, which they could at anytime if they wanted too)

It will probably need some reconditioning. Shampoo interior, check brakes and suspension. Fix leaks and change all fluids, filters and belt. Buff out or clear the headlights.

If the engine or transmission dies, all three of my examples used engines are $500. Change it out and keep using the car.

It is possible to have $300-400 per month in actual vehicle costs.

$100/mo depreciation
$100/mo preventive maintenance and wear items, (tires, oil changes, brakes)
$100-200/mo average repair fund.
Meaning you could go 6 months without needing repairs. Then 2 things break on car in one week. After that i may problem-free for another few months.
 

rideshare2870

Well-Known Member
Golden. This is the way to do it!!!

My market is 16 years. You can get a 12 year old car $3000. Craigslist. There are a lot of 4cyl Fusions and Pontiac G6 in that price range. I know someone who just got a 2008 Prius $2900. Good for 5 years. (Assuming they dont change year requirements, which they could at anytime if they wanted too)

It will probably need some reconditioning. Shampoo interior, check brakes and suspension. Fix leaks and change all fluids, filters and belt. Buff out or clear the headlights.

If the engine or transmission dies, all three of my examples used engines are $500. Change it out and keep using the car.

It is possible to have $300-400 per month in actual vehicle costs.

$100/mo depreciation
$100/mo preventive maintenance and wear items, (tires, oil changes, brakes)
$100-200/mo average repair fund.
Meaning you could go 6 months without needing repairs. Then 2 things break on car in one week. After that i may problem-free for another few months.
16 years? Wow, you got me beat. We got 15 years here in Buffalo NY. Also, that’s exactly my point right here, cheap car will come with cheap used parts. It’s not worth new parts when it’s destined to die from the wear and tear anyways.
 

doyousensehumor

Well-Known Member
16 years? Wow, you got me beat. We got 15 years here in Buffalo NY. Also, that’s exactly my point right here, cheap car will come with cheap used parts. It’s not worth new parts when it’s destined to die from the wear and tear anyways.
I just checked, Uber says 15 years here too. But last year 2002 was okay. I think I have another year left. Mine is a 2003
 

MadTownUberD

The Trendy Transporter
Moderator
You cannot fix a vehicle forever. At some point you will need to buy another vehicle. Depreciating it through mileage etc. hastens the day of reckoning. Yes you need to consider depreciation. Cars have market values for a reason. If you could fix them forever cheaply they wouldn't depreciate down to near zero.

The above is compounded by northern climates in which vehicles are subjected to road salt.
 

New2This

Well-Known Member
Your vehicle will devalue over time even if you do not mile it out.
This is so true.

I went with a friend of my mom's to buy a new Lexus SUV. She paid cash for it, almost $50,000 IIRC.

It currently has less than 7,000 miles on it ( yes 7,000 miles, she is the quintessential little old lady who rarely drives), is in pristine condition and according to KBB is worth $25,000-$28,000.
 

dctcmn

Well-Known Member
I plan on fixing my car and keeping it for a very long time.. Seems kinda like considering the value of my half eaten cheeseburger. It doesn't matter I have no plans on selling it.
Yes, but the more miles you put on it, the quicker you will need to replace it. 1.2% of vehicles last until 200k and .2% of vehicles last until 300k, so every mile you put on your vehicle brings it closer to death and the need for replacement. You need to account for that to have an accurate measure of how revenue much you are truly netting by doing this.
 

Dammit Mazzacane

Well-Known Member
Your depreciation value may have a big factor for an insurance total claim.
Insurance adjuster: "So usually these 2015s are worth $10,000, but you have about 60,000 more miles than usual on this one, so we see on the market for these cars with that mileage it's worth $4,000... so that's what your payoff is." "Uh, wot? I paid $19,000 for it!" "Don't worry, you earned like $20,000 doing Uber right - I heard you guys make decent money!"

Yes, but the more miles you put on it, the quicker you will need to replace it. 1.2% of vehicles last until 200k and .2% of vehicles last until 300k, so every mile you put on your vehicle brings it closer to death
Insane throwaway society.
 

Christinebitg

Well-Known Member
every mile you put on your vehicle brings it closer to death and the need for replacement. You need to account for that to have an accurate measure of how revenue much you are truly netting
Okay, you can say I'm being picky. But...

You need to account for that to have an accurate measure of how much PROFIT you are netting. We already know what the _revenue_ is. Revenue is what Uber sends you. Subtract your costs from that to get your net profit.
 

Dammit Mazzacane

Well-Known Member
Good news, there is this calculator for partially identifying true net profit... https://uberpeople.net/pages/EarningsCalculator/

(mark "none" for Uber Commission if you are going off of after-commission take-home pay for the calculation)

Screen Shot 2019-01-06 at 11.53.42 PM.png
i.e.

... and these are about right, I used two-fifths (under one-half) of a tank and that would cost me about 15 bucks at the pump to refill. The numbers would be lower if I didn't include some tips in the "fares" calculation.

Now this needs to be paired with a car costs estimator.
 
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