6 ms·

Did anyone do the math on using Uber vs buying a car? I probably spend like 100 per month on Uber

by _RPM 9y ago

anthonybsd 9y ago
Depends if you need to travel long distances (over 50 miles). If the answer is yes, Uber is simply not a good option. Otherwise no.
- Sleeep 9y ago
  Not quite, it depends how often you need to travel long distances and what the other options are for that travel. If you only need to drive 100 miles four times a year and otherwise have zero everyday commute costs because you ride a bicycle to work then renting a car four times a year is almost certainly a better option than buying a car just for those trips. Additionally, if there is frequent and reliable train or bus service to your destination that may be a better option than driving. I know several people who don't own cars but travel 100+ miles via bus on a regular basis. On the other hand, I travel 100+ miles regularly but buses and trains don't go to where I am going. (There's people who justify buying a truck because they need to haul stuff twice a year at the most. Renting a truck twice a year is almost guaranteed to be a better option financially. That being said, if you want a truck because you like trucks, that's also a perfectly valid reason to buy one.)
  - anthonybsd 9y ago
    Agreed, I greatly oversimplified things. There's the whole matter of convenience too which I didn't even touch upon. As it happens I have a car (weekend trips) and use Uber too (during the week), and use public transportation. Convenience is the driving force behind my usage.
ghaff 9y ago
It really depends on a lot of things. -- Amount that you drive -- Availability of Uber when/where you need it -- Whether you have to pay for parking -- Whether you also take a lot of weekend trips -- etc. $100 per month is actually not very much. That suggests you're only traveling 100 miles per month or so on Ubers which is nothing. By contrast, that would basically take me to the nearest large city and back once or get me back and forth to my office a couple of times. If you live in a city, you'd probably pay a pretty decent chunk of that amount just in auto insurance.
- i_cant_speel 9y ago
  Do you live in a dense city? $100 would not get me anywhere close to 100 miles in the city I live in.
  - ghaff 9y ago
    I don't live in a city and have only used Uber a handful of times. But UberX has been in the ballpark of about $1/mile when I've taken it to and from airports and that seems consistent with numbers I read online. Perhaps the cost is higher in a dense city with lots of lights and traffic.
nfriedly 9y ago
$100/month is a pretty low transportation expense. If you buy a car, you're going to spend more than that for the next few years, but if it was a used car, you might pay ~$250/month for 3 years and come out ahead in 8-10 years. If you go for a new car, you could easily pay $600/month - at that point it would take > 18 years to break even. Of course, there are other things to take into account: convenience on the one hand, maintenance, parking, & insurance on the other. But, my gut instinct is that you'd be better off to keep taking uber and invest the difference in an index fund. Keep that up for long enough and you can buy a new car in cash (or retire early). [edit]: Don't forget that you can bicycle also. A $400 bicycle has an incredibly high ROI if you replace a few regular car trips with bicycling. It's a net gain for your health too! (You may already be doing this, but it's worth pointing out anyways ;)
- wsxcde 9y ago
  > If you buy a car, you're going to spend more than that for the next few years, but if it was a fairly inexpensive used car, you might pay ~$250/month for 3 years and come out ahead in 8-10 years. Do those numbers include maintenance and insurance? IME just routine maintenance on an oldish (60-100k) Toyota runs into the hundreds of dollars. Insurance again something like ~$800-1000. I got rid of my car after I did the math and realized I was spending $1500-2000 a year on just insurance and maintenance.
  - nfriedly 9y ago
    Not explicitly. Although in my case (2001 civic until about a month ago) car insurance was less than $300/yr, and repairs & maintenance was probably a bit less also, probably under $1000 most years.
    - wsxcde 9y ago
      What insurance were you using? I've looked into some of these cheaper insurance companies, but I worry about whether they would really stand up for me if something did go wrong. One scary story I heard from a friend of friend was related to this cut rate insurance company in NJ. They assigned 20% of the blame to the friend even though it was clear cut case where the other guy didn't yield on a left turn.
Sleeep 9y ago
This is incredibly specific to an individual, so specific that the math would have to involve an algorithm with probably 15+ inputs. Consumer Reports and the like have calculated "true cost of ownership" for different model cars you can use as a rough guideline. They estimate depreciation, taxes, financing, gas, maintenance, and insurance over 5 years. However, that's just a rough estimate and only a first step, it doesn't take into consideration individual variables. If you are a young male, have to drive in stop-and-go traffic every day, and pay to park everywhere your cost of ownership will probably be close to double. Auto insurance alone is probably close to $100 a month for the average American - depending on your car, location, and driving record, of course, I'm just making an educated guess. IIRC, last I ran the numbers with my car (average budget model) cost of ownership was around ~$20,000 over 5 years. That's amortized to $333 a month.
wsxcde 9y ago
I wish I'd done the math on Uber when I bought my car some years ago. I ended up paying ~$80 a month on insurance alone. Add in the initial cost of the car, maintenance and fuel, it was not at all worth it in comparison to just shelling out for a Lyft whenever I needed one. So by my math if you're spending $100 a month on rides, you're well in the black in comparison to owning a car. The main (and perhaps only) advantage to having a car is the convenience and the ability to go where ever whenever.
- ghaff 9y ago
  A lot of people (including myself) live in locations and have activities (including commuting) that pretty much make not owning a car a non-starter. But it's certainly true that for people who don't need to drive on a regular basis, a lot of reason to own a car may come down to things like not wanting to deal with Zipcar or a regular rental car every time you want to do a big shopping trip or get out of town on a Saturday or for the weekend.
- defen 9y ago
  You can certainly save a lot of money (depending on your location / usage pattern) by going carshare-only; but one thing I've found is that it can result in a sort of cognitive fallacy (not really a fallacy per se; rather a thought pattern that can be tricky to avoid) where every trip you make becomes subject to economic considerations, far more than it would have if you'd owned a car. For example if you have a friend who lives 15 miles away - it becomes "do I want to spend $50 to visit my friend?". If you drive your own car, the economic calculation is invisible - it's about $2 of gas, a bit of depreciation that you don't even think about, and [huge already-paid upfront cost for vehicle/financing/insurance that you don't even think about] - "of course I'll pay $2 to visit my friend!" One thing that helped was making a spreadsheet that showed how my total cost of transportation went from $8k/year to about $1200/year when I switched to Lyft/ZipCar and ditched my own vehicle. So even if I were to add in a weekly $50 friend-visit, I'm still paying less than half for my transportation than I previously was.
  - ghaff 9y ago
    Based on the standard IRS deduction, a 30 mile round trip would be about $15. (And the marginal cost is less than that--your insurance at least doesn't generally go up by mileage except to the degree it slightly increases the probability of an accident.) But I agree with your basic point. If people had a clicking meter whenever they got into their car, they'd think a lot more before they turned the key. Some might say this was a good thing. Personally, I think mobility is generally positive.
jedberg 9y ago
I did. It was cheaper to own a car (but not by much). My specifics: I live in Cupertino and work at home. I have a wife and kids. About four times a month we have a situation where we need two cars, because one of us has to be somewhere other than where they kids need to be. Unfortunately, most of the time that's San Francisco, which is about $80 round trip with Uber/Lyft. I could sometimes use public transit, but usually the times don't work out and it takes a really long time, and I'd still need a ride to and from the train on both ends. I have a five year old car so the payments and maintenance still come out to a little be less than Uber/Lyft, and since I've already got another car, the cost of insurance doesn't add much. It's pretty close in cost, and the convince pushes it over the breakeven point.
jnwatson 9y ago
I bet you're underestimating what you spend on Uber. That's only about a dozen small trips. 12 trips a month makes the calculus easy: don't buy a car.

Did anyone do the math on using Uber vs buying a car? I probably spend like 100 per month on Uber

by _RPM 9y ago

Did anyone do the math on using Uber vs buying a car? I probably spend like 100 per month on Uber

Depends if you need to travel long distances (over 50 miles). If the answer is yes, Uber is simply not a good option. Otherwise no.

Sleeep 9y ago
Not quite, it depends how often you need to travel long distances and what the other options are for that travel. If you only need to drive 100 miles four times a year and otherwise have zero everyday commute costs because you ride a bicycle to work then renting a car four times a year is almost certainly a better option than buying a car just for those trips. Additionally, if there is frequent and reliable train or bus service to your destination that may be a better option than driving. I know several people who don't own cars but travel 100+ miles via bus on a regular basis. On the other hand, I travel 100+ miles regularly but buses and trains don't go to where I am going. (There's people who justify buying a truck because they need to haul stuff twice a year at the most. Renting a truck twice a year is almost guaranteed to be a better option financially. That being said, if you want a truck because you like trucks, that's also a perfectly valid reason to buy one.)
- anthonybsd 9y ago
  Agreed, I greatly oversimplified things. There's the whole matter of convenience too which I didn't even touch upon. As it happens I have a car (weekend trips) and use Uber too (during the week), and use public transportation. Convenience is the driving force behind my usage.

ghaff 9y ago

It really depends on a lot of things. -- Amount that you drive -- Availability of Uber when/where you need it -- Whether you have to pay for parking -- Whether you also take a lot of weekend trips -- etc. $100 per month is actually not very much. That suggests you're only traveling 100 miles per month or so on Ubers which is nothing. By contrast, that would basically take me to the nearest large city and back once or get me back and forth to my office a couple of times. If you live in a city, you'd probably pay a pretty decent chunk of that amount just in auto insurance.

i_cant_speel 9y ago
Do you live in a dense city? $100 would not get me anywhere close to 100 miles in the city I live in.
- ghaff 9y ago
  I don't live in a city and have only used Uber a handful of times. But UberX has been in the ballpark of about $1/mile when I've taken it to and from airports and that seems consistent with numbers I read online. Perhaps the cost is higher in a dense city with lots of lights and traffic.

nfriedly 9y ago

$100/month is a pretty low transportation expense. If you buy a car, you're going to spend more than that for the next few years, but if it was a used car, you might pay ~$250/month for 3 years and come out ahead in 8-10 years. If you go for a new car, you could easily pay $600/month - at that point it would take > 18 years to break even. Of course, there are other things to take into account: convenience on the one hand, maintenance, parking, & insurance on the other. But, my gut instinct is that you'd be better off to keep taking uber and invest the difference in an index fund. Keep that up for long enough and you can buy a new car in cash (or retire early). [edit]: Don't forget that you can bicycle also. A $400 bicycle has an incredibly high ROI if you replace a few regular car trips with bicycling. It's a net gain for your health too! (You may already be doing this, but it's worth pointing out anyways ;)

wsxcde 9y ago
> If you buy a car, you're going to spend more than that for the next few years, but if it was a fairly inexpensive used car, you might pay ~$250/month for 3 years and come out ahead in 8-10 years. Do those numbers include maintenance and insurance? IME just routine maintenance on an oldish (60-100k) Toyota runs into the hundreds of dollars. Insurance again something like ~$800-1000. I got rid of my car after I did the math and realized I was spending $1500-2000 a year on just insurance and maintenance.
- nfriedly 9y ago
  Not explicitly. Although in my case (2001 civic until about a month ago) car insurance was less than $300/yr, and repairs & maintenance was probably a bit less also, probably under $1000 most years.
  - wsxcde 9y ago
    What insurance were you using? I've looked into some of these cheaper insurance companies, but I worry about whether they would really stand up for me if something did go wrong. One scary story I heard from a friend of friend was related to this cut rate insurance company in NJ. They assigned 20% of the blame to the friend even though it was clear cut case where the other guy didn't yield on a left turn.

Sleeep 9y ago

This is incredibly specific to an individual, so specific that the math would have to involve an algorithm with probably 15+ inputs. Consumer Reports and the like have calculated "true cost of ownership" for different model cars you can use as a rough guideline. They estimate depreciation, taxes, financing, gas, maintenance, and insurance over 5 years. However, that's just a rough estimate and only a first step, it doesn't take into consideration individual variables. If you are a young male, have to drive in stop-and-go traffic every day, and pay to park everywhere your cost of ownership will probably be close to double. Auto insurance alone is probably close to $100 a month for the average American - depending on your car, location, and driving record, of course, I'm just making an educated guess. IIRC, last I ran the numbers with my car (average budget model) cost of ownership was around ~$20,000 over 5 years. That's amortized to $333 a month.

wsxcde 9y ago

I wish I'd done the math on Uber when I bought my car some years ago. I ended up paying ~$80 a month on insurance alone. Add in the initial cost of the car, maintenance and fuel, it was not at all worth it in comparison to just shelling out for a Lyft whenever I needed one. So by my math if you're spending $100 a month on rides, you're well in the black in comparison to owning a car. The main (and perhaps only) advantage to having a car is the convenience and the ability to go where ever whenever.

ghaff 9y ago
A lot of people (including myself) live in locations and have activities (including commuting) that pretty much make not owning a car a non-starter. But it's certainly true that for people who don't need to drive on a regular basis, a lot of reason to own a car may come down to things like not wanting to deal with Zipcar or a regular rental car every time you want to do a big shopping trip or get out of town on a Saturday or for the weekend.
defen 9y ago
You can certainly save a lot of money (depending on your location / usage pattern) by going carshare-only; but one thing I've found is that it can result in a sort of cognitive fallacy (not really a fallacy per se; rather a thought pattern that can be tricky to avoid) where every trip you make becomes subject to economic considerations, far more than it would have if you'd owned a car. For example if you have a friend who lives 15 miles away - it becomes "do I want to spend $50 to visit my friend?". If you drive your own car, the economic calculation is invisible - it's about $2 of gas, a bit of depreciation that you don't even think about, and [huge already-paid upfront cost for vehicle/financing/insurance that you don't even think about] - "of course I'll pay $2 to visit my friend!" One thing that helped was making a spreadsheet that showed how my total cost of transportation went from $8k/year to about $1200/year when I switched to Lyft/ZipCar and ditched my own vehicle. So even if I were to add in a weekly $50 friend-visit, I'm still paying less than half for my transportation than I previously was.
- ghaff 9y ago
  Based on the standard IRS deduction, a 30 mile round trip would be about $15. (And the marginal cost is less than that--your insurance at least doesn't generally go up by mileage except to the degree it slightly increases the probability of an accident.) But I agree with your basic point. If people had a clicking meter whenever they got into their car, they'd think a lot more before they turned the key. Some might say this was a good thing. Personally, I think mobility is generally positive.

jedberg 9y ago

I did. It was cheaper to own a car (but not by much). My specifics: I live in Cupertino and work at home. I have a wife and kids. About four times a month we have a situation where we need two cars, because one of us has to be somewhere other than where they kids need to be. Unfortunately, most of the time that's San Francisco, which is about $80 round trip with Uber/Lyft. I could sometimes use public transit, but usually the times don't work out and it takes a really long time, and I'd still need a ride to and from the train on both ends. I have a five year old car so the payments and maintenance still come out to a little be less than Uber/Lyft, and since I've already got another car, the cost of insurance doesn't add much. It's pretty close in cost, and the convince pushes it over the breakeven point.

jnwatson 9y ago

I bet you're underestimating what you spend on Uber. That's only about a dozen small trips. 12 trips a month makes the calculus easy: don't buy a car.