I think the real problem is that you had expensive cars. No shit you save money when you take ubers rather than owning a BMW M3 and (what I assume) was a decked out wrangler. If you bought a sensible car, your monthly costs could be much lower.
The big difference is this person is only using ~114 rides/year, whereas just commuting to work I use my car for ~400 rides/year. Add in one out and back weekend trip (ignoring shopping trips through the week etc.) and we're up to 500 rides/year. If my average ride cost were the same as this person ($17.50/ride) I'd be looking at over $700/mo.
Still, the goal is a ballpark not an exact number and that's plenty to say Uber would have been a poor fit.
Yes but the $17K plus the interest would be $18.7K. :)
And like I said, it's still a much better deal than Uber, but the opportunity cost of the up front money is often missed in these types of calculations, and can be significant.
I did not account for the interest that could've been earned on that $17k (which could conservatively be $1700, aggressively could've been another $17k).
I also did not account for the residual value of a 10 year old 120k mile Honda Fit, which is probably in the $5k range.
You need to look at pricinciple - expenses + interest for each month on both sides. Consider if he had a pile of money to cover 700$ a month in Uber driving and what would happen on each path.
But there is no way it gets 35 mpg. I have been keeping track meticulously and the maximum I get is about 30 mpg, and it drops to 27 if I do any city driving. If I do only highway driving, I can get up to 320 miles in a single tank, but I'm driving on fumes at the end. I normally get about 280 miles per tank, which is about 27 mpg at 10.6 gallons.
Also, with my 2011 Honda Fit, I'm at 120k miles. I've had 2 sets of new tires, but no other maintenance besides regularly scheduled maintenance.
Mine is an '08 - they seem to have gotten heavier in later years. It also has a manual transmission, which offers more flexibility for conserving brakes and fuel. My wife gets more in the 32-34mpg range, but doesn't keep close tabs on it - she also now has a couple car seats and toddlers in the car, so weight penalty.
EDIT: There might genuinely be an issue with your car - I have a 10.8 gal tank as well but routinely get over 400 miles per tank - 370 if I've been driving more aggressively.
MPG on the Fit depends on how you drive it. It hits max MPG at about 55MPH, if I recall correctly.
Now in TX you have highways with 85mph speed limit (most are 75), and in CA people drive as if the speed limit was 85 anyway - which is how I end up with the same mileage as what you report.
It’s an odd reference for the comparison.
Adaptive cruise control makes driving less stressful/more pleasant but you still have to be mentally there. No system is full proof, and certainly not at this stage.
I stand corrected ... THIS is the most hilarious thing I've read all day.
Edit: Removed the other adjectives because clearly, humor was intended.
This is the most "BMW driver" quote I have ever read.
$12,041 over 6 years is $2006 per year, which is about $167 per month.
All of my friends pay about that much just for car insurance every month. Throw in a car payment ($200/mo. - $500/mo. depending on the terms of the lease), gas, and maintenance (regular oil changes, tire replacements, etc.) and you'll end up way north of $12,000 after 6 years.
They said sensible car. A car you need a loan for is not a sensible car.
2. Even if I take your assumption as the other poster's definition of sensible and remove any car payment, gas + insurance + maintenance yields a 6 year cost above $12k. My point stands.
This will depend on the individual circumstances. Liability insurance is significantly cheaper than full coverage. Average annual liability insurance is ~$552/year [1]. Driving the ridiculous 12k miles per year that average americans drive, a Prius would burn roughly 226 gallons of gas. At today's price of gas ($2.94), that's $664/yr. At 6 years insurance and gas will run you $7,296. I'm very skeptical of depreciation + maintenance blowing $4,704 over 6 years on a Prius...
The high cost of car insurance, coupled with the low wages in this state, are a significant factor that kept a lot of my peers in poverty well out of high school. The usual story goes like this:
- Reliant on a hand-me-down car to get to work.
- Work barely pays for rent, car insurance, gas, and food.
- Car needs maintenance but no money for that.
Charitably, I think the lowest I've seen anyone's insurance payment in this state is $89/month, because they were over the age of 25 and their car fit the requirements for lower insurance rates nicely. They still had a car payment ($400/mo. IIRC) though.
Again: liability insurance is a different thing. When you don't own your car (aka when you take a car loan), you are required to have insurance that can cover the cost of the car. When you own your car, you only need to pay for liability insurance, which is much cheaper.
Your story is all too common in the U.S. It's expensive being poor here. The frugal solution is to have money to buy a car outright. It's tough getting out from under that dilemma.
You negotiate the price you are willing to pay. The dealer has no idea if you are leasing, paying cash, or financing. The all-in price is either financed or leased at a specified interest rate. They do not "add in" an up front payment. That doesn't even make sense, and would be incredibly misleading.
If we negotiate $25,000 for the car,and I finance at 0%, you are saying they up the price to $27,500 to "build in a profit"? Nonsense. The numbers are in front of you and you can do the calculations yourself with high school math. 0% is 0%.
You are totally out of your element and shouldnt be providing financial advice. Maybe that's why the dealer rips you off.
Edmunds has a calculator if you need help with the high school math: https://www.edmunds.com/calculators/incentives-rebates.html
You'll never, ever take Land Cruisers away from me.
I don't own car (nor have any intention of doing so) due to being too blind to drive safely, but not blind enough for any sort of government assistance.
(I'm not legally prevented from driving, I'm being considerate of the safety of others.)
Unfortunately Uber is kind of undermining public transportation though. In my city transit ridership is down, which ultimately impacts funding.
I can sit outside any sort of venue/party/bar and watch Ubers pull up by the dozen. 5 years ago most of those people would have been walking to public transit because cabs were more realistically priced (for the medallion owners at least, the drivers often got shafted there too). Uber trips often cost less than the price of simply stepping foot inside a taxi.
I've talked to my neighbors (6 college students sharing a house), and they've literally never taken public transit since living in the city, and we're ~5 minutes from a major bus station and ~10 minutes from a subway station. I was flabbergasted.
Of course, traffic is worse than ever (this is attributable to multiple factors not limited to Uber/Lyft).
Car culture is huge thing. I just bought an Audi S3, and derive pleasure whenever I hit the throttle.
I pay just over half of that for three cars and two adult drivers. (and in Massachusetts, which does not have a fully open/competitive insurance market.)
We definitely have a problem here in this state though.
We carry many multiples of the state minimum, which was needed to secure an umbrella policy for the excess. That doesn't include the umbrella, which we have in place mostly for other reasons (and is cheap).
Wife and I have not had any traffic infractions in over 3 years.
I haven't had a traffic infraction in at least 3 years (moved to West coast 3 years ago). ~30 year old male, married and are insuring a 2015 Cherokee with $2,500 deductibles.
My advice, if you can set aside $2,500 or have it in savings I would move your deductible up and use insurance for severe accidents. Don't use insurance to replace a cracked windshield.
Even the most bare bones policy I could find after that dropped off my record was $140 / mo for state minimum coverage at 22.
Annoyingly I never made a claim so all of that money was wasted in the end.
They claimed the rate would stay that way for several years, so I got rid of my car. I was going to get a car again once the rate lowered, but it turns out I didn't need one. Now I'm saving bundles of cash. (So, in a weird, way: Thanks, Progressive)
uber makes money on every ride. they operate at a loss annually because they invest everything in expanding to avoid paying taxes - like most companies do.
It's also true that it's not sure they will ever reach profitability. Therefore, my comment.
My girlfriend takes an Uber home from work every day right now (I drop her off in the morning then head to work. I'm still at work when she gets off work). It costs her an average of $25 per trip. 25 * 5 days a week * 4 weeks per month = $500/month in expenses. That's for a single 20 minute Uber (usually Lyft now, it's been cheaper) a day, that's it. I'm surprised the OP can get away with $167 in Uber expenses doing without two cars as the OP suggests.
It's about 40 extra miles I drive a day for her also, since her work is in the opposite direction of mine, so tack on the extra maintenance required for 800 miles per month on my car (hasn't been too much yet, but the car is starting to get old... let's say $40/month ), along with that much in gas (right now about $104 a month), and our total cost per month for her to go without a car is $644 a month.
My car payment is about $300 a month, so let's assume she can find the same or even less in a lease, especially since her credit is better, and I already estimated the fuel and maintenance as $140, but it'd transfer over to her paying it. Then she'd probably have to pay about $100 a month for car insurance (I pay less, but she'd be a new driver), and therefore our total costs for her to drive are probably around $540 a month, or about $100 a month cheaper.
To me that's a pretty slim margin. The main reason I wouldn't mind her starting to drive is it wouldn't be necessary to take her to certain places and save me an hour out of the day every day, not due to savings. Which I always assumed we would save a lot of money if she drove, until I did the math.
Also I live in the suburbs so if neither of us had cars our Uber expenses would be like $2006 a month, not per year, based on how much we drive currently. But it does look like having only 1 car in the household might be feasible, instead of the assumed 1 car per individual, like was the default in the previous generation.
You can even find pretty good lease deals on the more expensive BMW i3 - used electrics are pretty undervalued at the moment.