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Discussion Starter · #1 ·
So, how much money after fees do I have to bring in for some people to stop telling me it is a bad idea to purchase a car just for UberX and with cash? After 12.5 months, I am at $21,000; we paid $10,000 cash for the car and it has gone from 38,000 miles to 65,000 miles (not all business miles, but most are). I would not take $7,000 for it, but I would take $8,000. It is a 2012 Chrysler 200 with 65,000 miles.
 

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Unfortunately there is insufficient information to form a good opinion (I have my suspicions however which I will share).

All I can tell is that you drove 27K miles and you got a good deal on the car when you purchased it.

Using kbb I guestimated that the car was worth roughly 11K when yo bought it and is worth 8K now so you have used up about 3K worth of car. How much gas did you put in, what other expenses did you have? Then you have to consider when are you going to need to change the tires if you keep it, will you need to do a timing chain or belt, ....

I'm going to assume 25 MPG combined, average 2.50 a gallon gas over the year so gas was roughly $2700.

So, 21,000 - 3,000 worth of car - 2700 gas = $15300. then subtract your other expenses to get a net. Now the big question is how many hours did you put in? Divide to get your hourly rate and then you tell me if it was worth it. Only you can answer that question for you.

When you factor all the above in and insurance, telephone data, etc... I'm going to guess you are somewhere around 13K. If you worked 1000 hours you did good by Uber standards, if you worked 2000 hours you are below minimum wage and have lots of extra risk to show for it.

So, how do you think you did?
 

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Discussion Starter · #5 ·
Profitability of the market is a seperate issue from my business model of not financing a car or purchasing a car specifically for UberX. It is the criticism of purchasing a car with cash and/or the critics of purchasing a car specifically for UberX that I am questioning. How much do I have to clear after fees for some to admit having no car payment increases probability of success with this business venture?
 

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Profitability of the market is a seperate issue from my business model of not financing a car or purchasing a car specifically for UberX. It is the criticism of purchasing a car with cash and/or the critics of purchasing a car specifically for UberX that I am questioning. How much do I have to clear after fees for some to admit having no car payment increases probability of success with this business venture?
I didn't buy a car for uber. I already had it. But I do have payments. However the interest rate is so low that paying cash would have made no sense. Part of the calculation should be the post of the money--interest rate. Just because you CAN pay cash doesn't mean you should.
 

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Discussion Starter · #8 ·
Unfortunately there is insufficient information to form a good opinion (I have my suspicions however which I will share).

All I can tell is that you drove 27K miles and you got a good deal on the car when you purchased it.

Using kbb I guestimated that the car was worth roughly 11K when yo bought it and is worth 8K now so you have used up about 3K worth of car. How much gas did you put in, what other expenses did you have? Then you have to consider when are you going to need to change the tires if you keep it, will you need to do a timing chain or belt, ....

I'm going to assume 25 MPG combined, average 2.50 a gallon gas over the year so gas was roughly $2700.

So, 21,000 - 3,000 worth of car - 2700 gas = $15300. then subtract your other expenses to get a net. Now the big question is how many hours did you put in? Divide to get your hourly rate and then you tell me if it was worth it. Only you can answer that question for you.

When you factor all the above in and insurance, telephone data, etc... I'm going to guess you are somewhere around 13K. If you worked 1000 hours you did good by Uber standards, if you worked 2000 hours you are below minimum wage and have lots of extra risk to show for it.

So, how do you think you did?
Actual car usage is $2000.00; paid $10,000 now worth $8,000. Gas expence is accurate. 1 set of brake pads (my labor) and oil changes. Will need tires by December. I have driven more miles than expected and less surge than expected, however the setting of my own schedule and meeting the customer base (I am a lifelong Bulldog fan) and the simplistic process of what the task is actually about has made it a very tolerable activity. I am now curious as to how much after fees this venture will bring in.
 

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Discussion Starter · #9 ·
I didn't buy a car for uber. I already had it. But I do have payments. However the interest rate is so low that paying cash would have made no sense. Part of the calculation should be the post of the money--interest rate. Just because you CAN pay cash doesn't mean you should.
Should I pay cash for the gas expense of UberX? The same logic that tells me yes, also tells me yes to not having a car payment on my UberX car.
 

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If the choice is simply between paying $10k in cash for a car and financing $10k for the same car, then it all depends on the interest rate. Any rate below the current rate of inflation, finance it. Any rate above it, pay cash if possible.

But if you finance, you may have to insure it to the lender's requirements.

All of the other expenses will be the same no matter which you choose - depreciation, consumables, maintenance, repairs.

It gets more complicated if you have other debts. If you owed $x thousand on credit cards at a high interest rate for example, it would make no sense to pay cash for a car if you could finance it for a lower percentage rate than you pay on the credit cards.

It all depends
 

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Discussion Starter · #11 ·
Thanks to getting our butt in gear and paying off all consumer debt the last 4.5 years, our only debt is the house and going forward Romans 13:8-10; is the plumb-line.
 

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If the choice is simply between paying $10k in cash for a car and financing $10k for the same car, then it all depends on the interest rate. Any rate below the current rate of inflation, finance it. Any rate above it, pay cash if possible.

But if you finance, you may have to insure it to the lender's requirements.

All of the other expenses will be the same no matter which you choose - depreciation, consumables, maintenance, repairs.

It gets more complicated if you have other debts. If you owed $x thousand on credit cards at a high interest rate for example, it would make no sense to pay cash for a car if you could finance it for a lower percentage rate than you pay on the credit cards.

It all depends
That was pretty much my point. Right now my car payment interest rate is lower than the one on my house. If I have extra money I'd rather pay off my house then my car.
 

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Discussion Starter · #13 · (Edited)
That was pretty much my point. Right now my car payment interest rate is lower than the one on my house. If I have extra money I'd rather pay off my house then my car.
Without a car payment, you would have extra money to pay off your home early. However, emergency funds should be #1 priority anyway. Small emergency fund before consumer debt repayment plan. Large emergency fund before investing or paying off a home early. Emergency fund for this type of business for car repair or replacement. Start where you are. Not everyone lives paycheck to paycheck. How can someone's brain know how to have $10,000 in savings until it learns how to have $1000.00 in savings?
 

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Profitability of the market is a seperate issue from my business model of not financing a car or purchasing a car specifically for UberX. It is the criticism of purchasing a car with cash and/or the critics of purchasing a car specifically for UberX that I am questioning. How much do I have to clear after fees for some to admit having no car payment increases probability of success with this business venture?
I won't vouch for purchasing a car to drive for UberX.

But I 100% support NEVER having a car payment. Good for you not throwing thousands of dollars down a depreciating rat hole. And that goes for everybody, certainly not just Uber drivers.

Even if the interest rate is low, it does you no good unless you are INVESTING the money you "save" by not paying cash for the vehicle. And by "investing," I mean buying stocks and holding them for multiple years.
 

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Without a car payment, you would have extra money to pay off your home early. However, emergency funds should be #1 priority anyway. Small emergency fund before consumer debt repayment plan. Large emergency fund before investing or paying off a home early. Emergency fund for this type of business for car repair or replacement. Start where you are. Not everyone lives paycheck to paycheck. How can someone's brain know how to have $10,000 in savings until it learns how to have $1000.00 in savings?
You've been listening to Dave Ramsey? :)

You are on a stable path, my friend.
 

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So, how much money after fees do I have to bring in for some people to stop telling me it is a bad idea to purchase a car just for UberX and with cash? After 12.5 months, I am at $21,000; we paid $10,000 cash for the car and it has gone from 38,000 miles to 65,000 miles (not all business miles, but most are). I would not take $7,000 for it, but I would take $8,000. It is a 2012 Chrysler 200 with 65,000 miles.
10 grand one time payout.
That would shut me up, I'll sign a 2 year agreement.
I'll even shill.
"Uber in your lien free car! It's good!".
 

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Mathematically, payments absolutely make financial sense assuming that the interest rate is below inflation (which, admittedly, has slowed in the past 18 months). If, in 2011 for instance, you could have purchased a car with an interest rate below something like 3.5%, it would have actually been 'cheaper' to finance it rather than pay cash.
Except that you don't know what inflation is going to be over the course of the 3-5 years of financing.
 

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Discussion Starter · #18 ·
To get lower rates on cars, credit score is a factor. When credit score is irrelevant (meaning processing many other factors), purchasing the lowest cost car to get the job done (well) and with profits is were I put my energy. Some would advise me to take out a loan on my Chrysler today? To increase my savings? Because interest rates are low? Borrow on my car and invest the amount of the loan? What if at just the point that my income dips, the value of the investment is down and I can't make the car payment? No thanks, when my income is down (as it was during the Summer); my mailbox stayed void of car note bills. Breathing room... I suggest giving it a try.
 

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So, how much money after fees do I have to bring in for some people to stop telling me it is a bad idea to purchase a car just for UberX and with cash? After 12.5 months, I am at $21,000; we paid $10,000 cash for the car and it has gone from 38,000 miles to 65,000 miles (not all business miles, but most are). I would not take $7,000 for it, but I would take $8,000. It is a 2012 Chrysler 200 with 65,000 miles.
Your biggest problem is asking what will make criitics happy....NOTHING. That is the point, nobody is gonna live your life but you. Take in all the different arguments and views and see how it best fits your life situation.
 

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To get lower rates on cars, credit score is a factor. When credit score is irrelevant (meaning processing many other factors), purchasing the lowest cost car to get the job done (well) and with profits is were I put my energy. Some would advise me to take out a loan on my Chrysler today? To increase my savings? Because interest rates are low? Borrow on my car and invest the amount of the loan? What if at just the point that my income dips, the value of the investment is down and I can't make the car payment? No thanks, when my income is down (as it was during the Summer); my mailbox stayed void of car note bills. Breathing room... I suggest giving it a try.
It all depends on your attitude to risk. When the bank stocks (along with all the others, but especially banks) crashed in 2008 I was sure the market had overreacted. I tried to convince my wife to let me borrow $15k to buy selected bank stocks. She refused. If I had done that, I would have made $50 grand within a few months when the stocks rebounded, even after paying the loan back.

Had I been wrong and lost any of the $15 grand loan, though, I would have been nagged until the end of time - disobedience on my part was therefore too high a risk/reward ratio.
 
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