Who cares about depreciation?

Drivers Advice, Experiences
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#1

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.

#2

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.

#3

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.

#4

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.

#5

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.

#6

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?

#7

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.

#8

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.

#9

The numbers were just big round numbers for ease. Your 2008 isn’t taking as much of a hit, true. I drive an 08 as well. while depreciation isn’t as much of a factor, I know my repair/maintenance costs are going good to be higher.

#10

I did not read the specifics of you post before. if you are selling your car after only 20k additional miles due to uber you are sidestepping the depression.
With older higher milage cars there will be higher repair costs. If you pay it off and sell tjen buy a newer one… yeah depreciation isn’t a big deal. however you now have more overhead. It’s a wash.

#11

You can’t really plan on trade in values either. I bought a brand new at the time 2010 Chevy Cobalt. I drive it like a normal person with work, store runs etc. maintenance was kept up on it, and it sat for 5 months at the dealer to be repaired on 3 ignition system recalls while Chevy paid for a rental.

#12

Actually your house is only worth what someone will give you for it. There can be a thousand appraisers that give you a number based on figures, but until you have the hard money in you hand it’s only a number. The Phoenix market was the gold standard for this. In 2005 your home was worth $300k. In 2007 that same home is only worth $145k. Today the numbers are back up.

#13

How much was the car worth last year, when it was a year younger and 20k miles lighter. You may have only lost 300 in miles but you lost a year. that is also depreciation. I’m not saying you aren’t doing well. In my opinion, you are maximizing profits.

#14

Depreciation is felt when you replace the car with a new one for the gig. so if your car is worth $7,000 less than it would have been worth had you not driven for Uber come replacement time that’s an expense right out of your pocket book.

#15

Correct we all deal with depreciation because cars as a fact depreciate with. But those newer cars the depreciation is especially quick. Its generally not cost effective to drive a 2015 or 2016 car for Uber unless you do xl, select or black.

#16

I appreciate all of the input from math geniuses. I must be really bad at math because I keep thinking that all of the money going into my bank account is real money. If so many people didn’t keep telling me that I’m losing money as a ride share driver I would never have known.

#17

Yeah, that’s the part I’m still trying to figure out. They take Uber money at my bank, they let me pay my rent with it, they take it for car payments… why are all of these people taking fake money? It’s so weird.

#18

I couldn’t agree more! Driving for Uber or not- vehicles depreciate; that’s what they do! A savvy Uber driver makes sure that they set up a savings account with their bank that deposits 20% of every deposit to savings for vehicle expenses. Doing so is wonderful when it comes time for any repairs or trading in for a newer model!