What does it really cost you to drive per mile. Let me use an example of a Honda Civic to show you. While I’m at it, let me show you how to find what is a good deal for a car. .
How’s it going everybody this is beat the bush today we’re gonna look at what it really costs you to drive your car every single model now the irs suggests some reimbursement of about fifty four cents every single mile and now your company might pay you exactly that a little bit more or a little bit less so you figure out how much it really costs you per mile you
Can compare to that and figure out if you’re actually gaining money for every single mile that you’re driving or that you’re losing money so let’s check that out i’m going to use a honda civic as a base case actually a camera is actually a more popular car is the most popular car actually in 2016 but honda civic is not far behind and i’m gonna use this just because
I like that one a little bit better than a camry as a base case over here you’ll find a scatterplot on all those prices i could find on the honda civic coupe now the x-axis is actually the mileage of that car and the y-axis is actually the price of the car so every single point represents one single car now the years of these cars are not shown sometimes a 2012
Car might be more expensive than a 2013 car depending on the mileage generally you can see that the line kind of goes downwards if you look at the equation it says every single mile you drive you’re gonna depreciate your car roughly eight and a half cents now this is kind of optimistic because every single year the depreciation is a little different its steepest
Right when you buy the car this car costs about $23,000 new and you can see right when you have a few miles on it it depreciates roughly five thousand dollars immediately something to note is that you can easily reproduce this chart because you can just write down the price and the mileage of various cars that you’re looking at and then make this chart okay and
You can see all those little points at the bottom of this general shape actually represents a really good value because it’s under price from the average now all those points above means they’re overpriced so you grab a whole bunch of cars that you’re interested in all the same model you plot the price and the mileage so you can kind of figure out which one is
Cheaper now you may need to factor in the color other little factors like features and stuff but if you look at this plot look at the points towards the bottom that can kind of narrow things down go hey those ones at the bottom are really good deals so why don’t you just start from there now trying to figure out the depreciation for your car for every single year
Might be a little bit difficult because this is different every single year now i said i went to the edmunds website they have this calculator called the total cost of ownership and i’ll show you like the first five years of how much the car actually costs you so i looked up the total cost for a honda civic and they list various things for the total cost that you
Actually don’t have to pay for that car every single year they list things like the creation taxes and fees financing fuel insurance maintenance repairs and tax credit well you don’t get tax credit because it’s not a electric car depreciation yes it’s gonna vary by a little bit taxes and fees yes you’re gonna have taxes such as the license taxes and so this number
Is reasonable financing you may not have financing because maybe you bought the whole car in cash or you saved up for and then you bought it fully fuel prices changes all the time and it may depend on how you drive as well now every single year that’s listed here is actually for 15,000 miles that’s just what it assumes so every single year you’re driving 15,000
Miles and then the next year it’ll depreciate you know whatever it says over here insurance also changes depending if you’re trying to get one way to way depending on how good your record is maybe you got really good record or bad record which would cause that value here on their guests to change a bit maintenance is probably the ballpark as well because you could
Do it yourself can get it cheaper or you can get ripped off a lot and do it at the dealership of it so it’s a ballpark guess here so all of these numbers is just kind of like an estimate it’s a ballpark guess but it’s a good one you can just take it without doing a lot of calculation yourself on exactly what you spent and then you can take this number and figure
Out exactly how much they cost you to drive it every single mile so over here you’ll see the total cost to own it’s the same numbers as before i just pulled it from that website year one two three four five and since it’s 15 thousand miles every single year you just divide this total cost by 15,000 miles so you see even for this honda civic which is a relatively
Low priced car it’s gonna cost you 62 cents to drive this car because it’s factoring depreciation insurance all those other things i listed before and then you look at how much you actually get reimbursed 54 cents you’re actually on the losing end if you drive a brand new car for your mileage reimbursements so when you look at the very last time you’re actually
Losing 8 cents every single mile you drive for your work when you drive a brand new car this is mostly true for any brand new car because if you buy a bmw it’ll be even worse okay so you bought a brand new car is definitely not worth it to drive it during the first year for work purposes subsequent years you can see that every single mile yeah maybe you can make
17 cents 18 cents 16 cents 6 cents or something but you can see that that’s really little okay people normally don’t drive that minnie mouse for work purposes you don’t rack that minnie mouse it’s just good to know that you’re not actually making maybe 30 cents or 40 cents if you’d only factoring the fuel so i hope giving this example helps you can go on to the
Website which i’ll link in the video description down below and you can go check out how much it actually costs you for your own car don’t forget to give me a like on this video comment down below let me know if it helps you if you’re gonna drive more for a reimbursement or whatnot and don’t forget to subscribe over here thanks for watching
Transcribed from video
The Real Cost of Car Ownership | BeatTheBush By BeatTheBush
