# Guys, how you deal with depreciation of your cars?



## Torontonian1968 (Apr 30, 2016)

After driving for several months, I realized that I earned from Uber for hours spent driving with passengers, AFTER THE DEPRECIATION of my vehicle (according to CRA guidelines), less than minimum wage in Ontario.
After realizing that, I quit Uber.
Recently, I have heard that Ontario got new laws that provide minimum wage for Uber and other gig employees.
Does anybody know how this new law deal with depreciation of cars used for Uber?


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## Uber's Guber (Oct 22, 2017)

Torontonian1968 said:


> Guys, how you deal with depreciation of your cars?


Keep your nice vehicles parked in the garage.
Buy a "beater" to do this rideshare-shit and be sure to properly log your mileage so you can take advantage of the IRS deduction.


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## kdyrpr (Apr 23, 2016)

I started using my vehicle when it was 3 years old. It is now 9. I have 170K on it. According to Edmunds my resale value with 170K is $8700. Without rideshare miles I accumulated which are about 45,000, the value would be $2,000 more. Been doing rideshare since 2016 which is 6 years. I lost $333 a year. I put maybe one set of tires on it that would not have been necessary otherwise and had to change the rotors one more time than necessary. Maybe 7 or 8 more oil changes than would have been normal. I'll throw a figure of about 2K on that stuff. Loss of another $333 per year. 
So, about 1K a year in depreciation costs. So, yes it definitely cuts into what you make, unless you can do the work yourself. 

Am I figuring this out wrong?


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## UberBastid (Oct 1, 2016)

kdyrpr said:


> I started using my vehicle when it was 3 years old. It is now 9. I have 170K on it. According to Edmunds my resale value with 170K is $8700. Without rideshare miles I accumulated which are about 45,000, the value would be $2,000 more. Been doing rideshare since 2016 which is 6 years. I lost $333 a year. I put maybe one set of tires on it that would not have been necessary otherwise and had to change the rotors one more time than necessary. Maybe 7 or 8 more oil changes than would have been normal. I'll throw a figure of about 2K on that stuff. Loss of another $333 per year.
> So, about 1K a year in depreciation costs. So, yes it definitely cuts into what you make, unless you can do the work yourself.
> 
> Am I figuring this out wrong?


Yes, maintenance is different from depreciation.
Depreciation is the loss of value due to time and wear.

And, you're considering the EXTRA depreciation because it's used for business. 
You should be looking at TOTAL depreciation.

If you buy the car for $20,000 and it is worth $5k in five years, and you have to replace it every five years, your total depreciation is $15k, or $3k per year.
You should 'set aside' $3k per year for depreciation. So that at the end of the five years, you sell the car for $5k and go to your savings account for the other $15k and replace the asset.

What most people do is finance the depreciation, and pay interest on it. That is bad business management. Expensive, and it hides the expense from owners and investors.

As previously mentioned, you should NOT mix personal and business use of an asset. It confuses issues, and the IRS discourages it. It is not good Generally Accepted Accounting Procedures (GAAP).


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## oldfart (Dec 22, 2017)

kdyrpr said:


> I started using my vehicle when it was 3 years old. It is now 9. I have 170K on it. According to Edmunds my resale value with 170K is $8700. Without rideshare miles I accumulated which are about 45,000, the value would be $2,000 more. Been doing rideshare since 2016 which is 6 years. I lost $333 a year. I put maybe one set of tires on it that would not have been necessary otherwise and had to change the rotors one more time than necessary. Maybe 7 or 8 more oil changes than would have been normal. I'll throw a figure of about 2K on that stuff. Loss of another $333 per year.
> So, about 1K a year in depreciation costs. So, yes it definitely cuts into what you make, unless you can do the work yourself.
> 
> Am I figuring this out wrong?


yes you are doing it wrong

depreciation and maintenance are two different things

Depreciation is the value of an asset when it is put into service divided by its remaining economic life. For example my car was worth $20000 when i started driving uber and lyft. I planned on driving it for 3 years. at 70000 miles per year estimated its value would be $2000 then So I planned on using $18000 of value in 3 years, or $6000/year. So my depreciation cost would be $6000/yr or 8.5 cents a mile

In fact at the end of this year I will have driven 5 years at 70000 miles/yr. and the car is essentially worthless So at the end of the year my actual depreciation will be $4000/yr or less than 6 cents per year


Maintenance is the stuff you mention that you do to keep the car running, oil changes, transmission and cooling system service, brakes, tires, shocks, etc etc

If you are driving full time, and expect to replace your car at some point I think you should treat that depreciation as a real expense and put 5 -10 cents per mile in the bank so to have the money to buy another car when needed


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## losiglow (Dec 4, 2018)

Be like most rideshare drivers (which aren't very bright) and ignore factoring in depreciation as an expense, along with maintenance, tires and repairs. Focus only on gas (if that) when considering expenses so when you make $200 you can think, "oh, I made $160 today after gas" when in reality, you made maybe $140 when amitorizing all the other expenses (including depreciation).

Sarcasm aside, I hop on NADA each month, put in my mileage at the beginning of the last month, subtract that from the value I had last month, and consider that my depreciation cost for the month. Easy peasy. I keep a running tally of all other expenses to calculate a % overhead in cents/dollar. Right now I'm hovering around $0.18 / $1.00. Before gas prices went up it was closer to $0.15 / $1.00.

I would bet hard money that many drivers have expenses up to $0.50 on the dollar. If I've learned anything being on these forums, it's that most RS drivers aren't very smart.

As far as mitigating depreciation, that's just a matter of purchasing a non-German (except maybe VW), non-Chrysler product, then driving it until the wheels fall off. Ideally a Toyota or Honda product. Once you get past about 150K miles, depreciation drops off pretty quick. The difference in a car with 150K miles and 155K miles for example, isn't much. Nothing like going from 25K miles to 30K miles.


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## BrainDead Driver (Dec 15, 2021)

I cant comment . But i want to say if your milage is incorrect you can buy a milage programer from ebay for about 200 .This wonderfull tool will adjust your miles to the proper level. After that bad airfreshiner messed with yor instrament cluster and raised the miles to an inaccurate amount . Change it according . Does it really have 150k ? Or the average of 50 k as other cars ? Or that pot hole could also goof up a lot of electronics . Keep track of the miles you drive daily so you will know the proper miles driven . Does this answer some of your question ?


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## UStaxman (Aug 14, 2016)

Torontonian1968 said:


> After driving for several months, I realized that I earned from Uber for hours spent driving with passengers, AFTER THE DEPRECIATION of my vehicle (according to CRA guidelines), less than minimum wage in Ontario.
> After realizing that, I quit Uber.
> Recently, I have heard that Ontario got new laws that provide minimum wage for Uber and other gig employees.
> Does anybody know how this new law deal with depreciation of cars used for Uber?


i factor Depreciation based on my actual scenario -not tax laws (which in the States is based on MACRS and use ‘Standard Mileage’
* Canadian tax law will differ
My actual scenario (2014 Altima purchased at $12,000 (including tax) with 60K - driven 220K= .07 / mile Deprecation cost factor 
.10 / mile average cost of fuel 
.05/ mile Repairs cost factor 
Overall .22/ mile cost - overall gross revenue including ‘dead miles’ averages .75 / mile 
Key is operating an inexpensive reliable car which can rack up miles with minimal fuss


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## Ted Fink (Mar 19, 2018)

BrainDead Driver said:


> I cant comment . But i want to say if your milage is incorrect you can buy a milage programer from ebay for about 200 .This wonderfull tool will adjust your miles to the proper level. After that bad airfreshiner messed with yor instrament cluster and raised the miles to an inaccurate amount . Change it according . Does it really have 150k ? Or the average of 50 k as other cars ? Or that pot hole could also goof up a lot of electronics . Keep track of the miles you drive daily so you will know the proper miles driven . Does this answer some of your question ?


Yeah, fraud is the answer... LMAO.


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## circuitsports (Apr 19, 2020)

Cry and then tax maneuvers that make welfare pay me back.


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## kdyrpr (Apr 23, 2016)

Ted Fink said:


> Yeah, fraud is the answer... LMAO.


Put in any reasonable amount other than what the tax statements says. Trust me, it's not going to be disputed.


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## kdyrpr (Apr 23, 2016)

I have a 2013 Honda Accord that had 44,000 miles in 2016 when I began rideshare. Before that I averaged about 14K miles a year. It is now 9 years later. I am a part time driver. Usually no more than 15 hrs a week, but pretty consistent throughout the years. I now have 175K. That's about 50K more than I would of normally had.


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## Rideshare Dude (Aug 27, 2020)

People make depreciation more complicated than it needs to be. Basically your car depreciates with age and miles. When you drive a lot of miles that removes more value than age. The simple method I use is to look up my vehicle on Kelley blue book and NADA. Use their websites to calculate the value. Then re-calculate a value adding on how many miles you drive per year. Divide the difference in value by the number of miles and you have your depreciation per mile.


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## Chipin (May 4, 2018)

Torontonian1968 said:


> After driving for several months, I realized that I earned from Uber for hours spent driving with passengers, AFTER THE DEPRECIATION of my vehicle (according to CRA guidelines), less than minimum wage in Ontario.
> After realizing that, I quit Uber.
> Recently, I have heard that Ontario got new laws that provide minimum wage for Uber and other gig employees.
> Does anybody know how this new law deal with depreciation of cars used for Uber?


No kidding ! All Uber drivers end up losing a chunk of their income due to auto depreciation. Financial illiterates must pay the price. Taxi rates are HIGHER, to account for depreciation, repairs, maintenance as well as the possibility of an accident with passenger for hire insurance ).


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## 25rides7daysaweek (Nov 20, 2017)

My goal is to make so much money
that I dont have to worry about it....


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## Ted Fink (Mar 19, 2018)

kdyrpr said:


> Put in any reasonable amount other than what the tax statements says. Trust me, it's not going to be disputed.


TRUST ME, I'VE BEEN AUDITED... and I claimed only legitimate deductions. Anyone wants to roll the dice, go ahead, but don't cry if they check on you later. In my case it was two years later...


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## _Tron_ (Feb 9, 2020)

*Guys, how you deal with depreciation of your cars?*

I handle depreciation in an unusual way...
1) Bought a brand new EV dedicated to driving rideshare _part-time_.

2) I fixed my costs by paying $2,000 to extend the 8/yr 36K mile bumper to bumper to 150K miles.

3) At the end of 8 years the car will long ago be paid off and I should not be out of pocket for repairs. Therefore at that point I will assume the vehicle has depreciated to $0. Which is fine. My business plan assumes the car will be worth nothing after 8 years. Any further use I get from the car after that time will be a bonus.


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## Whosyourdaddy (9 mo ago)

Here is the secret.....go on a three hour roll at the craps table and pay cash lol


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## UberBastid (Oct 1, 2016)

How to make a million dollars in real estate in three easy steps:

Step 1: Start with two million bucks ...


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## _Tron_ (Feb 9, 2020)

Whosyourdaddy said:


> Here is the secret.....go on a three hour roll at the craps table and pay cash lol


Or a three hour _tour_. No worries about rideshare or delivery when you're trapped on a desert island.


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## bobby747 (Dec 29, 2015)

25rides7daysaweek said:


> My goal is to make so much money
> that I dont have to worry about it....


THATS IT...an older 2012 car too.


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## 232200 (7 mo ago)

I use a simple formula, I put away $200 a week toward new car replacement in 3-4 years. Another $150 for all maintenance, insurance, car washes etc, and another $150, now closer to $200 for gas. That’s $500-550 a week. Whatever I earn for the week, i deduct the $500, that’s my true earnings. I try to average minimum $1500 a week. I will always attempt to earn more, to make up for weeks that are slow and I miss my target. I’ve been successful with this method since October


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## OldBay (Apr 1, 2019)

Here is how I do it.

1) Buy a cheap used car. Lets say 10K. And the car has 60K miles on it already.

2) If you net $1/mi (depends on market and your ability), and the reasonable service life of the car is 200K miles, that means the car can net you $140K. If the reasonable service life is 250K, the car can net you $190K.

3) A CAR CAN'T DEPRECIATE MORE THAN YOU SPENT FOR IT! I consider depreciation of a car the up front purchase price of the car, not expecting to get much/any back when it is sold or totalled. If I get 3K when I sell it, that will probably cover the repairs I had to make in that time. 

3b) If you are obsessing over how much your car is depreciating for every mile you drive, its too nice a car.

4) If the car made it to 250K miles, then my net profit was 190K - 10K = 180K.


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## 232200 (7 mo ago)

Actually I don’t obsess at all about depreciation. I couldn’t care less. I take the depreciation cost out of my earnings. Whatever value the car has when I’m done with it is gravy.


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## UberBastid (Oct 1, 2016)

OldBay said:


> 1) Buy a cheap used car. Lets say 10K. And the car has 60K miles on it already.


Doesn't exist.


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## 232200 (7 mo ago)

UberBastid said:


> Doesn't exist.


You’re correct, no way you’re getting a clean reliable car with 60k miles for $10k. Not in this market. When I bought my 2022 Camry for MSRP, the dealer had a used one, one year older with 17k miles on it for $1000 less than I paid for mine. I’d assume they would probably negotiate $1000 off the price. It’s insane this market.


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## iamthenewguy123 (Aug 24, 2019)

I've got a more practical approach when calculating depreciation. Although the current car market is quite insane, it will likely normal out next year when we are officially in a recession. Dealerships won't want your trade once it hits 150k, and good luck selling anything once it hits 200k. Because of that I consider 200k to be worth zero, because regardless of what nada or kbb says nobody will want to buy it from you. So if you purchase a car for 20k with zero miles on it, every mile will cost you 10 cents. Some people will find it hard to grasp that each mile costs the same whether you're driving it for personal use or professional use, the only difference is you're experiencing depreciation at a much faster rate driving commercially. I also average tires at 1cpm and oil changes at 2cpm.


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## oldfart (Dec 22, 2017)

UStaxman said:


> i factor Depreciation based on my actual scenario -not tax laws (which in the States is based on MACRS and use ‘Standard Mileage’
> * Canadian tax law will differ
> My actual scenario (2014 Altima purchased at $12,000 (including tax) with 60K - driven 220K= .07 / mile Deprecation cost factor
> .10 / mile average cost of fuel
> ...


Adding to what you have said; Using the standard mileage deduction you can take a depreciation deduction every year. In reality you can’t depreciate your car to less than zero. Using your example once you have written off the $12000 purchase priceIn future years your depreciation expense will be zero bringing your total expenses to just 15 cents a mile

So while I’m not happy that gas prices are where they are; I am really happy that my car was paid for and fully depreciated before gas prices sky rocketed


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## painfreepc (Jul 17, 2014)

This was an interesting Thread I'm sad I found it late, so none of the depreciation of your car is due to its very age itself or even 1% of your own personal driving, all your cars depreciation 100% of it is due to Uber and all its maintenance is 100% due to Uber none of the percentage belongs to your personal driving.


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## painfreepc (Jul 17, 2014)

@25rides7daysaweek
Since you're going to give me an eyeball roll let me give you an example, only a few months ago I purchased a 2017 Lincoln MKZ Hybrid black label, it only had 44,000 miles on it, you could buy it at a dealer if you shopped around for about $25,000 you could buy privately for about 20 to 22,000 or even less, when this car was brand new in 2017 it's sold for around 45 to $50,000 that means in 5 years or is it close to 6 years this car only has 44,000 miles on it when I bought it but it already depreciated 20,000 plus dollars my point is you guys drive Uber and Lyft as I do but you try to say your depreciation on your car is all due to Uber and Lyft, a car depreciates the moment it comes off the lot and every year it sits in your driveway,


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## WI_Hedgehog (Aug 16, 2021)

I keep reading the title of this as, "Guys, how you deal with *depression* in your cars?"

But I live in Milwaukee and we have a lot of sad drunks.


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## Grubhubflub (Jun 16, 2018)

Torontonian1968 said:


> After driving for several months, I realized that I earned from Uber for hours spent driving with passengers, AFTER THE DEPRECIATION of my vehicle (according to CRA guidelines), less than minimum wage in Ontario.
> After realizing that, I quit Uber.
> Recently, I have heard that Ontario got new laws that provide minimum wage for Uber and other gig employees.
> Does anybody know how this new law deal with depreciation of cars used for Uber?


Why do y'all worry about the depreciation of your cars? Cars depreciate whether they are driven or not.


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## painfreepc (Jul 17, 2014)

Grubhubflub said:


> Why do y'all worry about the depreciation of your cars? Cars depreciate whether they are driven or not.


I would like to think I have a realistic view of what the depreciation or should I say extra depreciation to my car of doing Uber and or lyft, I live in the Inland Empire I do have some Network Tech skills, I could try to find a regular job, realistically I would probably be commuting 80 are up to 140 Mi round trip to a regular job, so what I do is I look at my depreciation for driving Uber and Lyft my maintenance cost and all that stuff, and then I say to myself what would it cost me if I got a regular job and I had to do a long commute to work, I take the difference the difference between an depreciation of doing Uber and Lyft and the difference between the depreciation of actually having a regular job where I had to commute, that is my realistic idea of what my cost is to do Uber and lyft, because if I find a regular job I don't plan to catch the bus there and I don't plan to stop paying insurance and obviously my car is still going to have some maintenance, that's my take on it,

If I had a job where I had to commute 100 Miles round trip five days a week in 5 years that will be nearly 130,000 Miles

So in 7 years that would be 180,000 miles just commuting to and from work, so I guess I should go ahead and get that job and do a CPM and then turn around and say I only make x amount or I only earn x amount of dollars from my job due to my car depreciation, I don't hear anybody else that has a normal job doing that do you.


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## Beninmankato (Apr 26, 2017)

Just rent a Tesla. All the cool drivers are doing it.


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## painfreepc (Jul 17, 2014)

Beninmankato said:


> Just rent a Tesla. All the cool drivers are doing it.


yes pay for hertz depreciation


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