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Lease-to Own, Can i make money in LA, Am i Crazy

Discussion in 'Pay' started by painfreepc, Aug 1, 2014.

  1. painfreepc

    painfreepc Well-Known Member

    Location:
    Fontana, CA
    Driving:
    UberX
    my credit is very bad so i am going to use the uber lease-to-own program to lease a
    Toyota Camry Hybrid LE @ $180 per week for 52 months,
    my car insurance will be a little high about $160 - $180 per month, a point will come off my driver license
    at end of August, so will get insurance a little cheaper,

    i live in fontana ca (san bernardino ca), but i plan to do most of my driving in LA,

    i will work 60 to 70 hours a week, all day and all night fri and sat, only off tue or wed:

    so am am looking at $220 a week for the car and insurance and another $160 to $200 for gas each week,
    thats $380 to $420 per week to run my car not including other cost to keep a car running well.

    Am i crazy if i do this, can i make money in Los Angeles
     
    Last edited: Aug 9, 2014
  2. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    That looks like a very bad idea and a terrible car deal. You'll be paying about 40k in total for a car that should only cost at most 30k (25k before taxes, financing, etc). I would only recommend doing UberX if you already have the car or would have got the car anyway. Unfortunately this is not something reliable enough to approach in the manner you have discussed. Any one of a number of things can happen at a moments notice which prevent you from driving or cause your earnings to nosedive. Then you're stuck with all that money lost.
     
    Sydney Uber and The Geek like this.
  3. painfreepc

    painfreepc Well-Known Member

    Location:
    Fontana, CA
    Driving:
    UberX

    The Toyota Camry Hybrid LE is $26.330, i plan to work hard getting my credit score up for the next 12 - 18 months,
    at that point in time i will give back the car and buy at a cheaper rate.
     
  4. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    Leases don't generally work like that. Terminating a lease is usually very expensive. Regardless, it's still usually a bad idea to buy a car for the express purpose of doing UberX .
     
    Last edited: Aug 1, 2014
  5. painfreepc

    painfreepc Well-Known Member

    Location:
    Fontana, CA
    Driving:
    UberX
    The Uber Lease Works Like That.. it's just a very small fee to give it back or pay the 52 months
    and buy it for a $1.00 at end of lease
     

  6. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    I see. The problems still would be your still paying about $450 per month too much over a dealer lease. I've been quoted a new Camry hybrid (good car choice I think) lease at under $300 per month with little down. So, the high termination cost is sort of built in, or paid as you go. It's really a lot of money to sink into a gig like this. Many struggle just to clear $10 per hour after all expenses on an existing car. And the more hours you work, the harder it is to have a high hourly rate. Is easier to make some higher hourly rates for perhaps up to 20 prime hours a week. Going to 30+ hours it gets much harder. I've done it here, and you may have to triple your hours just to double your fares.
     
  7. painfreepc

    painfreepc Well-Known Member

    Location:
    Fontana, CA
    Driving:
    UberX
    you're comparing apples to oranges,
    a $300 or less car lease for a Camry hybrid with little down is for someone 750+ credit score and will only allow 10k to 12k miles per year and a full cost buy out at end of lease.

    The uber lease-to-own has no credit check, unlimited miles, buy car for $1 at end of lease, and you have option to walk away from from the lease at any time for a small fee.

    here's some info, source: http://uber.santanderconsumerusa.com/frequently-asked-questions/

    Lease-to-own Specific Questions
    How many miles can I drive?
    The lease is an unlimited-mile program with *expected use of 40,000 miles per year. *See your contract for details.
    Why do I need insurance?
    We require you to have a certain amount of insurance to protect yourself, as well as SCUSA, in the event of an accident or if the vehicle is damaged or stolen. Refer to your lease agreement or call for details.
    Who is the vehicle registered and titled to?
    As in a traditional lease, you will be the registered owner of the vehicle and SCUSA will be the lessor.
    When will my first payment be due?
    The first payment will be withheld on the Friday following your first full week driving on the Uber platform.
    How much is the upfront payment?
    The upfront payment due at signing is $2,000, which represents a $1,000 capital cost reduction and a $1,000 security deposit.
    • You can put as low as $1,000 down at the dealership. The shortfall will be charged to you in the form of a fee and will be prorated for the next 52 weeks to be paid in addition to your monthly payment.
    • In years three and four of your contract, we will begin giving your security deposit back in the form of a credit to your weekly payments.
    How much will it cost me to buy the car at the end of the term?
    The vehicle purchase price at the end of the lease term is $1 plus applicable state taxes, title and registration fees.
    How much of my $1,000 security deposit will I get back?
    At the end of the lease term, you will receive the complete deposit amount less the following depending on whether the vehicle is 1) purchased or 2) returned.
    Option 1Purchase
    • $1 residual value amount
    • Unpaid fees or payments (if any)
    Option 2Return
    • Lease return fee $595
    • Excessive wear and tear (if any)
    • Unpaid fees or payments (if any)
    If I return the vehicle prior to lease end, what is the lease termination fee?
    Turn in YearFee
    1$1,000
    2$750
    3$500
    4$250
     
  8. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    Regardless of the financing terms, my main point is it's a bad idea to get a car if you don't have one already. I pay $300 a month regardless if I drive for Uber/lyft. I had this car before I ever considered it. I will buy out the car for the same price regardless. I pay $50 a month for insurance regardless. The only extra to me is loss of value due to miles should I sell it. To start with UberX with an incremental monthly cost increase of $800 per month + insurance (almost $1k per month total) that you did not have before is a very bad idea. There is no security to this gig whatsoever. If anything, it is best geared toward using something that you already have. The net pay is generally very low. You will be competing against drivers who have much less overhead and will work for much less.

    Now, if this were like a halfway normal, consistent, dependable business that would be completely different. If Uber gave priority and higher pay to people like you with experience and a nice new car, that could be different. Instead, they are in a furious race to the bottom to make fares cheaper than owning a car. Look at all the rate cuts still going on. We're closing in on half the fares of cabs in many areas. Only those with the lowest incremental costs are likely to get by in this environment.

    Uber may saturate your area with drivers, you can get rated out, you may be accused of something, you can get in an accident, you can get one wrong ticket, etc. This is happening in my market. The hours and pay I could once obtain just a few months ago are nowhere near that now. Frankly, I don't even drive much anymore. It's rarely even worth my time. I'd likely do better as a $10 per hour shuttle driver.

    See also similar reddit discussions:
    http://www.reddit.com/r/uberdrivers/comments/292stt/upgrading_car_for_uberx/
    http://www.reddit.com/r/uberdrivers...nyone_used_the_uber_vehicle_purchase_program/

    Also mostly pretty scathing reviews of Santander:
    http://www.consumeraffairs.com/finance/santander.html
    http://santander-consumer.pissedconsumer.com
    https://www.creditkarma.com/reviews/banking/single/id/santander-bank
    http://www.yelp.com/biz/santander-consumer-usa-fort-worth
    http://www.ripoffreport.com/reports/directory/santander
     
    Last edited: Aug 1, 2014
    Allaffair likes this.
  9. ElectroFuzz

    ElectroFuzz Well-Known Member

    Location:
    Phoenix, AZ
    Hold on now....
    *expected use of 40,000 miles per year. *See your contract for details.

    San Bernardino to Downtown LA is 60miles
    Back and forth every day 60x2=120miles
    5 days a week 120x5=600 miles
    52 weeks a year 600x52=31,200 miles
    That's 31,200 miles just to get to work!

    I do this part time here in Phoenix and according to my calculations I will probably
    hit 60,000 miles in a year.

    It just doesn't add up.

    Ask and see what happens if you put 80,000 miles a year on the lease
    then you can make an educated calculation.

    :(
     
    Sydney Uber and grams777 like this.
  10. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    Good point. When I drove 60+ hours a week. I was running through miles at what would be close to a rate of 100,000 miles per year. It was somewhere around 5,000 miles every 2-3 weeks. 300+ miles a day or so is easy to put on. Driver saturation can also lead to more miles as you may have to try to get away from or maneuver within the pack more to get a ride.

    So if that lease is based on 40k miles per year, that's 60k miles allowed after 1 1/2 years. If you put on 150k miles in that time, that's 90k miles over the limit. That's assuming a mileage penalty for terminating early as indicated in the 2 page attachment at the bottom of of the post. If so, assume 20 cents per mile x 90,000 miles = $18k extra to terminate early? Then basically you would have to see the lease through to the end. You couldn't realistically roll out of it to a better rate.

    IMG_0929.JPG

    Also see this for another cost perspective including a Santander lease:
    http://valleywag.gawker.com/beautiful-illusions-the-economics-of-uberx-1589509520

    And some similar program details here from Atlanta (see attached):
    http://imgur.com/a/bLWmF

    IMG_0926.JPG IMG_0927.JPG
     
    Last edited: Aug 2, 2014
  11. Dave P

    Dave P Member

    You might do better to rent secure parking in LA and drive a cheap car back and forth.
     
  12. uberlady

    uberlady Active Member

    Location:
    Philadelphia
    Driving:
    UberX
    I looked into the Santander lease deal. It is HORRIBLE. No way, José.
     
  13. LAuberX

    LAuberX Moderator Moderator

    Location:
    Los Angeles
    Driving:
    UberX
    Anytime I light up the customer/rider app I see TONS of Uber cars. I drive in L.A. and the time between pings just keeps getting longer, it now takes 10 hours to make what I did in 6 a few months ago.

    if you MUST buy a car to do uber, what about a place like Drivetime that finances those with low credit scores?

    Paying 15% interest (I have no idea what high risk interest really is, just an example) on a $10,000. car that will do Uber is better than a $40,000 dollar car any day.

    price per mile is what counts. .20 per mile over 37,500 mi/year I did not know about, Livery use full time I can see you doing 60,000 mi/year easy.

    The Taxi cabs in Los Angeles are all Salvage title used cars for a reason, low cost.
     
  14. Art71

    Art71 Member

    Location:
    Detroit, Michigan
    Driving:
    UberX
    I still believe Uber Lease to own is a pretty smart deal. {2015 Chrysler 200 MSRP starting at$22,000} Small amount down, aprox $119/week totals about $25,000 . Three thousand in interest about $3,000 for four and half years compared to paying on a car for 72 months, to keep payment reasonable. Even low interest your still paying a set amount for two years longer. And traditional financing, I am pretty sure you can only deduct interest on the finance charge, unlike lease payment.




    If I return the vehicle prior to lease end, what is the lease termination fee?
    Turn in YearFee
    1$1,000
    2$750
    3$500
    4$250
    This seems better then trying to sell a two year old car with 100,000 miles on it with a bad smells in it when you still owe $18,000

    I see more positives then negatives.

    But I am still researching other avenues and boulevards.
     
  15. ktownla213

    ktownla213 New Member

    Location:
    Los Angeles
    From the same post where the information sheet was posted.
     

    Attached Files:

  16. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    I wonder if this also applies if you early terminate. Or is it just so you dont have to pay .20 cents per mile extra upfront. Leases can be complicated matters. I think you'd need to carefully look over an actual contract. Somehow I doubt you could run up 200k miles in two years (causing $20k of depreciation) and then turn it in early for just a small amount. If you could, it might be ok, assuming you actually could get that much work from uber for two years. Hopefully you don't get deactivated and have to fight for deactivation like this guy:
    http://uberdriverdiaries.com/diarie...-uber-cheating-drivers-on-ride-incentives-/p1

    Still, the actual details of financing is just a side issue to the problem of over committing to this volatile gig.
     
    Last edited: Aug 2, 2014
  17. The LAwnmower

    The LAwnmower Active Member

    Location:
    OC / LA
    If you are going to do it you gotta drive for Lyft too. Maximize your time. You can make over $1000-$1700 week driving for both working 50+ hours week. You have to work every Fri-Sat night from 8pm-3am to get any surge pricing. Usually if I drive about 100miles logged onto the app I will make about $125 bucks. If you want to make $1500 a week you will be driving about 1250 miles for that week not including your commute.
    I understand about your credit so you are somewhat limited on your options for a car. The ideal car would be a 2010 Prius with 70k miles that you buy semi cheap and burn it into the ground with the miles.
     
  18. vtexposfan

    vtexposfan Active Member

    Location:
    Boston
    Driving:
    UberX
    I took over the last 7 months of somebody else's lease after perusing CL and I use that to drive Uber. I know how aggressively Uber hires drivers, and at 4.57, I'm alright, but it's not guaranteed work.

    That's why I didn't buy a car just to do this 20 hours a week. Check out swapalease.com. Find somebody who didn't use many miles relative to the remaining time left on the lease. I took a 2011 Rav4 with 18,500 miles and 7 months left. That's a ****ton of free miles. I won't get anywhere near the maximum 45,000, and anything less than that is just a much sweeter deal when the lease ends in January and I can buy it for $14,000.
     
  19. painfreepc

    painfreepc Well-Known Member

    Location:
    Fontana, CA
    Driving:
    UberX
    i will call the dealer on monday and ask a few questions,
    i need answers about the following

    "The lease is an unlimited-mile program with *expected use of 40,000 miles per year. *See your contract for details."
    and
    Option 2 Return
    • "Excessive wear and tear (if any)"
    it reads like unlimited miles is only unlimited if you keep car for the full 52 months,
    so if return car in 12 to 18 months with 60k, 70k, 80k, 90k, or even 100k total miles,
    are they going to ask for maybe $0.20 per mile overage, what about wear and tear?
     
    grams777 likes this.
  20. Sydney Uber

    Sydney Uber Well-Known Member

    Location:
    Sydney Australia
    Driving:
    UberBLACK
    The small print on these deals are almost impossible to decipher. They are a real trap for commercial vehicles. Which if you are driving four or five days a week builds up to the sort of milage that commercial vehicles carry out. If handing back the vehicle before the term expires they will ensure there are simply no scratches or wear marks that detract from its resale value and make you to rectify that. The other option to the Finance company is to simply shove it through the used car Auctions, and the difference between its sale price and what they would have gotten if you have completed your Finance term is what they will ask you for as a residual/ balloon payment.

    Finance companies never let up and will chase you for that money, insuring your credit rating sits in the toilet for years to come.
     

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