joao_pimentel

ok, do like this, before filling in the inputs to the simulator, go to a stand, and ask how much they will give you for your vehicle. Then, fill in the simulator form.

the amounts are not comparable, and I don't think anyone would give me anything for my pair of socks after I buy them.

If you ask a stand, you're sure, they will give you a certain value for your car, on that condition it is. That's certainty, you know your asset today, has that value.

RPK79

Another issue with using your method of depreciation is that you can't gauge the cost of using a car over a period of time, you can only gauge what your depreciation is today.

I-Like-To-Bike

Sure it does. The reason why some of the very high car costs often cited here are so inflated is that the depreciation costs are almost all based on a new car purchases with a three or five year life of ownership. Anyone very concerned with keeping depreciation costs/car expenses down does not keep buying and selling new cars every 3-5 years and repeatedly absorbing the big depreciation expense.

The OP's calculator does allow showing depreciation costs over a more realistic time span than the calculators that inflate car expenses by use of arbitrarily short spans of ownership. It is also not locked into the purchase of only new cars for computing average car expenses as are some of the well known calculators often cited on LCF.

I second Machka's recommendation that the OP lose the reference to "toy" ASAP if he expects to be taken seriously.

joao_pimentel

I know, that's true. As I said: two different methods for different purposes, both correct

RPK79

Well, I guess this is a great calculator for determining if it is cost effective to purchase a car to drive to work, return home, and then sell the car.

joao_pimentel

The term "toy" was just a slight provocation, I didn't mean to be disrespectful to anyone. I perfectly know, many people need their car on a daily-basis, though many others, use it on a very irrational way, when they have plenty of alternatives for their mobility, mainly in urban areas.

A simple 200 meters walk quite often is done by car! But then people go to the gymn and do 10km on the machines. That's irrationality!

Mobile 155

If you take your assumption about quitting a job and getting one right across the street would that same thing apply for people living where winter fuel costs are in excess of $1000.00 a month? Simply move south and save money by getting a job there even if it pays less? So people living in the tropics are actually better off than people working in the North east or Canada in the winter? However in business we can declare part of our vehicle as an expense rather than moving and still make what we are making without having to take a cut in pay. If we also take the time to save cash and buy a car outright don't we save a considerable amount of money per month as opposed to making a payment on a car, or even public transportation? I haven't had a car payment in 13 years. I mean isn't the decision on how we spend the money we earn really up to the individual? I don't ever use a credit card, pay for what I get up front, and my home is paid for so I only pay less than $1500.00 a year in property taxes so anything I spent on a car would be offset by savings on rent or housing? I believe Rowan has decided quality of where he lives is worth what it cost to use a specific tool to provide for his transportation. I doubt if there is a calculation for living where you prefer. Just sayin.

B. Carfree

The US Census confirms that only about 20% of all driving is for the purpose of commuting. The rest, and some of that, sure looks to have a lot of playing involved. I think toy is the appropriate term. We, as a society, mostly use cars to entertain ourselves, not as tools to meet a food/clothing/shelter need. (No, I'm not opposed to people entertaining themselves, but motorists seem to all too often try to pass their play off as something else.)

Machka 

Yes.

Same as Australia, only in Australia we use Australian dollars.

Or actually, on second glance, it might be litres/kilometre.

joao_pimentel

I don't know the US Census, but in Europe, on those items they don't consider things like car depreciation, or car insurance. Basically, if a person has a car they consider only fuel, taxes and tolls, and that doesn't give you the overall figure of how much financial effort you really put on your car

Machka 

It's roughly this ...

If it takes approx. 1 hour of work to pay for the cost of using the vehicle that day, going to the distant job ...

Therefore the take-home pay is Pay/Hour * 7 Hours (instead of Pay/Hour * 8 Hours)

Compare that with a lower paying job closer to home where it might take 15 minutes to pay for the cost of using the vehicle that day (or using other transportation).

Therefore the take-home pay is Pay/hour * 7.75 Hours (instead of Pay/Hour * 8 Hours)

And which one comes up with the higher total?

JReade

By this, my truck costs me 380 a month.

joao_pimentel

No, because you then start to talk about large scale economic differences and I don't need to live next to the river, to save on my water bills, since that is perfectly affordable. Though, I remind you that automobile costs account, on average in the western world, for half of the net income of a common citizen. Nothing comparable to any other personal expenditure.

If you would go to the tropics to spare 5% on your overall bills, spending less house fuel, maybe you would earn less 50% on your sallary, and that wouldn't be worth the change.

But that, it's not at all the case with the automobile. People really spend a lot of money to afford having a car, and if they simply sold it, and switched to part-time on their job, spending more time in public transports, they would still gain money.

Not at all, that's a common mistake. Imagine John and Jim are brothers and they want to buy exactly the same car, starting at the same time point, having the same money on their accounts. John saves money to buy a car outright and Jim used car finance. John had to wait to save the money, and Jim starts to use the car right away. After 5 years of car possession Jim just had one extra cost, that John didn't have: finance interests. But he didn't need to wait to save the money, so he bought time paying interests. That's the only difference.

You didn't save any relevant money for having bought your car outright, only interests.

Sure, anyone spends the money where they want, as I said I could use a helicopter to go to work being there in just 5 minutes because "time is money"

joao_pimentel

Each case is one case, but I don't have a car for 3 years now, and I don't miss it; neither my wallet

Roody

Actually, many people on this forum have used depreciation to deflate their car expenses because they want to minimize those expenses in their own minds. They say, "My seven year old car has already depreciated so depreciation is no longer a cost to me." So they put zero dollars or euros in the column for depreciation.

For the household budgeter, the most useful calculation is to determine the number of months you expect to keep your car. Then subtract the expected resale value (at that time) from the purchase price. Divide by the number of months, and you have the average monthly depreciation costs. Examples:

• Buy a car for $30,000 and sell it in 5 years (60 months) for $10,000: (30,000-10,000)/60=333; monthly cost is $333.
• Buy a car for $30,000 and sell it in 10 years (120 months) for $5,000: (30,000-5,000)/120=208; monthly cost is $208.

Obviously this figure will never be zero, as people here often have claimed.

The car calculators on the web that you're referring to (Such as AAA, the IRS, and Kelly Blue Book) figure depreciation costs for the average person, who replace their new car every five years, or whatever. And these are not exactly radical anti-car organizations.

RPK79

Well it would be if you owned the car past the estimated usage date, but yes, I agree 100% and this is what I have been trying to say.

Roody

Even if you owned the car for 1,000 months, the depreciation cost would not be zero. The only way the cost would be zero is if the car was given to you, or if the resale value was greater than or equal to the purchase price.

joao_pimentel

No, that's another common mistake. If a friend would have given you a 20$ note and then you had lost it, wouldn't you define that as a cost? The fact that someone gave you the car, it just means that you got an asset for free. The depreciation principles don't change.

The depreciation is only zero, if you could sell the car, at exactly the same value the car had it, when it came to your hands (normally this is the price you paid for it). It may rarely have apreciation (gain, not a cost) if the car value increases, like you find out you have a classic, or you realize that (for any other reason I can't figure out) the market gives more money to your car, that the amount it had when you got it

Mobile 155

So you are saying people who give up a full time job should quit, take a part time job giving up benefits and wages, take public transport to that part time Job that their costs would be so offset they would be better off? Isn't under employment something that has been listed as a serious concern for our economy and society today? Plus do you consider rent a total loss financially? And if as you say a car is 50 percent of someone's income how are they even living when so many pay half of their income on rent or house payment? I have never had a car payment that was even equal to half of my house payment. Now I have no house payments and I don't pay rent so maybe I am just having a hard time grasping how 90 percent of western households can have cars? Where do you live where the number is much less?

memebag

My car costs me 5 hours of work per month by your calculations. I drive 40 miles round trip to work. Neither biking nor public transit are options for that.

I-Like-To-Bike

If you actually want people other than car free ideologues to look at or try your calculator, rather than provoke them, you should avoid digs that are not as slight as you may think.

I-Like-To-Bike

Source for this dubious factoid?

Machka 

+1

And not only in the title ... the OP makes digs all the way through this thread. Starting posts with "Wrong" isn't exactly a way to endear the other poster to you.

Machka 

If this calculation tool is designed to show people how much their “toys” cost, then why not include some comparisons with other “toys” such as yachts, bicycles, horses, golf, miniature train sets, etc. Why single out the car? After all, the money we spend on recreation is ours to spend how we like … my choice … your choice …

There are probably things I spend recreational money on that you don’t, and things you spend recreational money on that I don’t. And that’s OK.

And when it comes to recreational money, for most people, the first and foremost consideration is enjoyment. Is this something I enjoy doing? I would venture a guess that most people don’t sit down and make a decision about their recreational activities based first and foremost on finances.


Some other things to think about when considering the car as a recreational tool ...

Suppose someone likes to travel. There are many methods of travel and people have different preferences … flying, taking the train, sailing, cycling, driving a car. In order to accomplish the goal of travel, each person has to make their own calculations/decisions about which would be the best for them.

For example, flying might be expensive but might get you there faster, so you might spend less on accommodations and food. But maybe you want to see stuff along the way, and you want a flexibility flying can’t offer, and ability to cover long distances relatively quickly that cycling can’t offer, and can use your van as accommodation. So maybe driving is the better choice. Your choice of travel might both cost you money and save you money, one way or the other, while allowing you to enjoy the type of travel you like.

Suppose someone likes cycling where they live, but would also like to travel further afield to cycle in events or to cycle in different scenery some weekends. That person might be able to arrange something with trains and busses to get where they want to go, or that person might choose to put the bicycle in/on their own private vehicle and go. The decision could include financial calculations on which would be the best method, and also a consideration about convenience.

In both cases above, the person could opt to stay in the area where they live and never go anywhere (financially that would be the least expensive option) … but since we’re talking about “toys” and recreation … how boring is that! The whole point of spending money on “toys” is to have fun!!

Machka 

No.