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Why do people care about depreciation so much?

Discussion in 'Advice' started by kay_, Dec 6, 2016.

  1. kay_

    kay_ Active Member

    Location:
    Los Angeles
    It gives me anxiety every time I read someone comment about it, but then I realize who cares??
    I bought a 2013 Toyota Prius, 14.2k, with 50k miles. It's had previous structure damage so it's a car to dump in the trash when I'm done with it anyway.

    It's not my dream car so I could care less, I'm 25 so I'll probably just keep it to have as a hybrid car for family roadtrips or something once I choose to buy a car I really want. Are a lot of people using brand new cars or something??
     
    johnny pastrami and circle1 like this.
  2. simpsonsverytall

    simpsonsverytall Well-Known Member

    Location:
    Maryland
    Because the whole idea of working, is to increase your wealth.
     
  3. JimKE

    JimKE Well-Known Member

    Location:
    Miami
    My experience with depreciation discussions is that people who discuss depreciation have no real clue what the word means, or how it is applied in real life.
     
  4. CrazyT

    CrazyT Well-Known Member

    Location:
    Maryland
    Driving:
    UberX
    Even with a brand new car, I drive a 2016 Prius, I'm not worried about it. Cars are an asset, yes, but they always depreciate rapidly. Depending on the car you can lose a few thousand in value just taking it off the lot. My Prius is a business asset, but not an investment. The only time you can increase wealth with a car as an investment is to have collector cars and a strong economy to sell them if needed.

    As much as I love cars, unless we're talking about classic American heavy metal, they're all disposable and get tossed when you're done with them.
     
  5. Delivery Mr.Guy

    Delivery Mr.Guy Active Member

    Location:
    Boston
    Example: Uber driver invested $20K on the car for a business, after 4 years driven for Uber than he need another 20k to replace a new car.
    If some one else invested $20k in stock or own gold bar or own a cell phone shop or pizza shop than after 4 years the $20k is turned into $200k.
     

  6. Driving and Driven

    Driving and Driven Well-Known Member

    Location:
    Dallas
    Depreciation affects how much you may get when you trade in your car. If you only plan on using one car your whole life, don't worry about it.
     
  7. A_Driver

    A_Driver Well-Known Member

    Location:
    Springfield
    Driving:
    UberX
    I have a new car. I get a stipend from my full time job of about $450 a month to cover the car and insurance @ 75%, they figure I use it for personal use, I should have to pay something. Plus they pay a variable mileage rate to cover fuel and maintanince. I drive 35-40k miles a year for my full time gig. My stipend covers the cost of me buying a new $20k car every 4 years. My situation is not common, but depreciation isn't an issue for me. For everyone else, you need to consider the big picture. Your basically borrowing money from Uber against your vehicles value in most cases.
     
    Last edited: Dec 7, 2016
  8. simpsonsverytall

    simpsonsverytall Well-Known Member

    Location:
    Maryland
    Which is fine if you just received news from your doctor that you have 10 years to live.

    Depreciation isn't some abstract concept. It is an estimate in regards to the concrete worth of your car.

    That is not to say that it's necessarily 100% accurate, or that planning to own a car for the life of the car, and having good fortune and great maintenance can't lower the wealth-depleting effects of depreciation to a degree.

    The main point (attempting to be) stressed, is that you properly consider REALITY when calculating net profit. You don't get to do the breakdown and let opinions overrule factual realities.
    I mean, you can, but then it's a 'delusion that you crafted to conform to your confirmation bias', not a 'net profit/loss financial statement'.
     
    ABC123DEF likes this.
  9. Grahamcracker

    Grahamcracker Well-Known Member

    Location:
    Honolulu, HI
    I don't care about depreciation. I care about how profitable this gig is and it's not that impressive here. I had 2 snot nosed little kids try to get me to take them to school today without an adult accompanying them. That's the kind of stuff that burns my beans! About 20 minutes total of dead driving and wasted time.
     
  10. Driving and Driven

    Driving and Driven Well-Known Member

    Location:
    Dallas
    If you care about how profitable it is, then you need to care about depreciation.
     
  11. Grahamcracker

    Grahamcracker Well-Known Member

    Location:
    Honolulu, HI
    Why do I need to care about depreciation when I drive a 2008 Honda Fit that I use only for Uber? When I am done with Uber, I will sell it for KBB value. What about depreciation do I need to care about?
     
    circle1 likes this.
  12. wk1102

    wk1102 Well-Known Member

    Location:
    treasure coast fl
    Why do people care about depreciation so much?

    Uhmmm . ... really?
     
  13. Driving and Driven

    Driving and Driven Well-Known Member

    Location:
    Dallas
    For the record, when KBB determines the value for you, they are taking into consideration depreciation. THAT, in turn, determines the cash value you will get for your trade-in or outright sale.

    So, by referring to KBB, you are taking into consideration depreciation.
     
  14. wk1102

    wk1102 Well-Known Member

    Location:
    treasure coast fl
    Lol.. wow.


    It's simple math man.

    If you paid 15k for the car. and sell it for 5k that's 10k depreciation.

    If you made 25k doing uber subtract 10k for depreciation .

    Or, just drive blindly don't keep track of other expenses either... why bother.
     
  15. freddieman

    freddieman Well-Known Member

    Location:
    seattle


    okay.....how much did u pay for that prius including tax, fees, interest if applicable?
     
    melusine3 likes this.
  16. Grahamcracker

    Grahamcracker Well-Known Member

    Location:
    Honolulu, HI
    Okay, I see your point however the differece is less than $300 with 20k more miles on a car that is already paid off and that I'm ready to sell anyways. In 20k miles of driving for Uber/Lyft I will make far more than $300. The big factor in depreciation is age of the vehicle. So, I stand by my previous statement, I am not worried about my Honda's depreciation.
     
  17. freddieman

    freddieman Well-Known Member

    Location:
    seattle

    well, you can slow down the rate of depreciation. thats what we're all trying to do...... since less depreciation equates out to money saved.
    [
     
    melusine3 and X-X_Driver like this.
  18. Driving and Driven

    Driving and Driven Well-Known Member

    Location:
    Dallas
    It's just good info to know as a concept in general. You will not have that car all your life. You are young and will likely have several cars. You should be familiar with the knowledge so you can make good decisions on future car deals.
     
    ABC123DEF and Shangsta like this.
  19. kay_

    kay_ Active Member

    Location:
    Los Angeles
    CrazyTCrazyT My thoughts exactly. My prius is an asset to make money now to survive off of. In the long run, I never expected to make profit off of Uber in all honesty because realistically none of us are. My car isn't an investment. Assets are always going to depreciate.

    I guess since I'm not planning on driving Uber more than 9 months at the most. Although my car will surely depreciate, I don't believe I'll be running it into the ground.
     
    ABC123DEF and zulu like this.
  20. freddieman

    freddieman Well-Known Member

    Location:
    seattle
    you will care about it when dealer makes u an offer for trade in.
     
    melusine3, Drive2bFree and Emp9 like this.
  21. Grahamcracker

    Grahamcracker Well-Known Member

    Location:
    Honolulu, HI
    Are you kidding me? Did you read the other post before posting this one? Your talking about huge effort
    You should read my other in this thread before posting, so you have a better idea of what your talking about. I see you throwing around huge baseless numbers. I already did the simple math and provided the information to another in this thread before you posted this reply.
     

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