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Travel job + car wear and tear


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Old 24th November 2017, 4:39 AM   #1
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Travel job + car wear and tear

Does anyone have a traveling job? If so, what concerns should I worry about in regards to wear and tear on my car?

I was offered a lucrative travel medicine job. I would have to travel to 2 facilities a day and provide specialized medical services to patients at the facilities. The job offers $4,000 a year for a "car allowance" as you must use your personal vehicle to get to each site.

When I mentioned the job to my brother yesterday, he suggested that I buy a cheap old Honda as my work car and not put miles on my 2015 car that I just bought over the summer. My current "new car" has great gas mileage, is safe and reliable. I should have it paid off in 3 years or less. I owned my previous car since I was 16 (hand me down family car when I got my license) and I was repairing it each year (it had about 260k miles on it). I already have significant student loan debt as a fairly recent graduate. For everyone who drives a lot for work, is a junk work car the way to go/ necessary?

Side note: I'm female and prefer a safe reliable car vs one that may have me stranded in the boonies alone. I have a few more interviews lined up for non-traveling jobs but I believe these jobs will pay less, require call and will be more hours and stress.
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Old 24th November 2017, 7:42 AM   #2
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There's a bit of math involved in determining the right choice. You need to estimate the maintenance and depreciation on your current car vs the extra costs of a second car. A friend of mine bought a cheap, barely used Hyundai Accent for work to avoid putting miles on his Audi A6. What is your current car?
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Old 24th November 2017, 7:43 AM   #3
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Safe reliable car definitely.

This is actually a tax question. You get so much money for mileage, gas & insurance as a deduction (well at least now before the tax reform).

For 2017 the business rate is $0.535 per mile https://www.irs.gov/tax-professional...-mileage-rates That means if you drive 100 miles you would be entitled to $53.50. When I was getting paid mileage I took the money & threw it in a special savings account to help pay for a new car down the road.

So do the math. How far will you be traveling? Multiply by about 50 cents per mile (because the rates vary from year to year) and see if the $4,000 comes close. If it's way off, negotiate a better car allowance rate before you take the job.
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Old 24th November 2017, 9:40 AM   #4
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Assuming your actual costs of operating the vehicle are consistent with the tax deduction rate (a fair assumption), they're compensating you for 8k miles, or 154 miles per week or 30 per day. Calculate the extra milage per week (X52). If you'll actually be driving that amount or less it's probably fair.

The reason companies prefer to pay you mileage instead of providing a car is that it benefits the company. The executives who make such decision are not mathematically challenged. Individuals, otoh, will tend to underestimate the actual cost of operating a vehicle, and the additional bucks added to the paycheck make you feel well compensated. People's relationship with money is emotional... corporations, not so much.

Another aspect to consider is how disciplined you are with money. If you are being well compensated, and you're sure you can take that car allowance money and save it all, then it will enable (and necessitate) you to trade more often drive newer cars. However, if you use that money as a Christmas fund, or to help pay for summer vacation, you'll end up in a squeeze.

You may be able to come out ahead if you're being compensated at the tax rate but manage to operate the car for less. Depreciation is a big factor. If you're trying to optimize the bucks, choose a domestic sedan (used) with known reliability. They depreciate the fastest, so buy one that's five years old and has 50K+ miles. European and Japanese cars sell for a premium and hold value better... and you will NOT come out on this deal driving a premium priced car.

I'm curious to hear how many miles they want you to drive for $4000.
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Old 24th November 2017, 1:20 PM   #5
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Personally, I prefer an older, American made car. I avoid Asian vehicles at all costs. Why? Parts are much more available for American cars, and they are cheaper too. If you try to get parts for a Toyota or Honda, they cost about twice as much and are difficult to put in because the cars are so small and tightly fitted together. I also avoid newer cars made within the last ten years - too many electronic things that break, and parts are expensive or simply unable to obtain. There's almost nothing at a salvage yard for a 2015, for example, and very little in the way of aftermarket parts. To service your 2015, you will be paying full dealer prices for all your parts, and that will cost almost four times as much as a car that is somewhat older and has some aftermarket items available.

I don't have a traveling job, but I commute to work, and sometimes I like to take trips. I'm a girl and I like something reliable, but I ultimately want something that is cheap and has decent performance. For me, that means American made, between model years 2000 and 2006, or 1985 and older. I carry parts and tools in the trunk, and I handle small and medium jobs myself. Much of owning an older car or a car with high miles comes down to proactive maintenance. Having multiple cars also lets you take one out of service while you drive a different one, or wait for special order parts. I order many of my parts online so I don't pay sales tax, and installing them myself saves me tons of money on labor. I also get the joy of driving something that handles exactly like I want it to, and I look good doing it. You have to ask yourself what kind of features you need. For me, I would rather pay for more fuel than suffer with a tiny four cylinder engine with no power. My vehicles have large V-8 engines, because having some extra acceleration can help you avoid an accident or escape a bad situation.

$4000 is not much money if you have to drive a lot of miles, so you have to figure what your own part in this is going to be, as well as the tax breaks you will get. Another little tip - if you are new to working on your own stuff, make friends with someone who is a better mechanic than you. Anybody can learn if they have a decent teacher and pay attention. Once you learn some things, it also gives you a valuable skill that you can barter with friends or coworkers in exchange for other favors or services.
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Old 25th November 2017, 3:44 AM   #6
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Shining One:
I'm not so sure about maintenance so far as I haven't had to do anything yet except a routine oil change (and soon new tires). Gas wise I'm getting between 30-33mpg on average.

My current car is a Subaru Outback

Donnivain:
So if my contract gives me $4000/ year in a car allowance, I'm not allowed to keep track of my own mileage and turn it in during tax time to get a write off? I'm not 100% sure how much I'll be driving. I was given a list of cities that my facilities may be located. The cities ranged from 5 miles from my home to 65 miles away. I currently drive 40 miles to work (not daily, 7-8 shifts every 2 weeks)

Salparadise:
I'm not 100% sure how much I'll be driving. I received a list of cities I may be assigned to. The potentially furtherest one was 65 miles away and I'd only go there once a week if any. However someone else is already assigned to that territory 65 miles away so I doubt I'll be going that far. Also my townhouse lease ends in July so I could potentially relocate in July to cut down on my commute. The job would be a 2 year contract so if I absolutely hate the driving I could always find another job in 2 years.

I'm very disciplined with my money. I keep track of every penny I spend with budget apps. My brother on the other hand is not disciplined with money. He has multiple cars, multiple houses, goes on multiple vacations per year and is in a ton of debt. Hence why I'm a little skeptical on his idea of purchasing another car just for work. It seems like keeping up routine maintenance of one car is cheaper than keeping up with 2 cars 😕 I still have my first car as well. It's sitting at my moms house and is used a family "spare car" now. The gas mileage is horrible though since it's an SUV and it's too unreliable for trips out of town. I've spent many 100 degree summer days stranded on the highway waiting for AAA with my old car.

Major Merrick:
Excellent points to think about. My parents had a German car growing up and I remember them complaining about the cost of parts. My biggest concern on buying a "work car" is the maintenance. I don't want to have to throw money into another car every 3 months for minor issues if I don't have too.

---
When I originally bought my car over the summer, I bought it thinking I was going to rack up the miles on it commuting to work. I was thinking that once I paid off my student loans, if I needed a new car by then I could get one.
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Old 25th November 2017, 6:24 AM   #7
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A quality late model car, like a 2015 Outback, won't require much maintenance at all. You're making making payments, paying interest on the loan, taxes, and the car is depreciating. That's the cost profile for a newer car. With older cars you pay for some maintenance, but presumably no loan, no interest, a much lower rate of depreciation, and much, much lower in actual dollars. Gas, oil and tires are variable costs (per mile) that are about the same for any car, adjusted for rate of fuel consumption of course.

There is no way that owning and maintaining two cars is going to save you money. You'll be paying high fixed costs on the newer vehicle, and higher variable costs on the older vehicle, but you'll still have some fixed costs on it too. Car ownership is a money pit no matter how you look at it, and two is twice as bad as one.

You will be able to deduct your mileage from your taxes (unless the new Republican tax bill takes that deduction away). But all that means is you reduce gross income by that amount (mileage X rate), you don't literally subtract if from the taxes owed. Don't tell yourself that you're saving money here. You're not. You're keeping records and working to keep them from penalizing you for your mileage compensation. You can only deduct miles driven after reporting to work, no the daily commute to your home office.

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Salparadise:
I'm not 100% sure how much I'll be driving. I received a list of cities I may be assigned to. The potentially furtherest one was 65 miles away and I'd only go there once a week if any. However someone else is already assigned to that territory 65 miles away so I doubt I'll be going that far. Also my townhouse lease ends in July so I could potentially relocate in July to cut down on my commute.
You REALLY need to figure out how many miles you'll be driving. That's the key to the whole thing. So let's say there's an equal distribution between 5 and 65 miles distance to the five locations, and you drive to a different one each day. That's 5, 20, 35, 50, 65, totaling 175. Multiply by 52 weeks, 9100. Now times 2 because you'll be driving to and from –– 18200. They're paying you for about 1/4 of that number of miles. So even if you don't visit the 65 mile location, you're probably only reducing that total by 20%. So let's assume that and see what the hard numbers look like. Using the tax rate of .535/mi, those miles are worth about $7800 (rounded to hundreds).

So they're paying you for roughly half of average cost of operating your vehicle for that many miles. That's why they prefer to pay you a fixed dollar amount instead of providing a car. Driving a late model Outback is going to cost you even more because it's still depreciating at a fairly high rate.

So reduce the salary by $4k when considering this offer, or negotiate a better deal on the car (actual miles at the tax rate, or provide the car). Also, consider that this is the kind of employer they are! But if the offer is lucrative enough in actual dollars it might still be a good opportunity for you. Moving is expensive –– it will probably cost thousands to move closer. I seriously doubt that will make sense when you run the numbers (many factors to consider).

One last thing... are you going to be driving on their time or yours?
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Old 25th November 2017, 8:01 AM   #8
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Originally Posted by Gillys View Post
Donnivain: So if my contract gives me $4000/ year in a car allowance, I'm not allowed to keep track of my own mileage and turn it in during tax time to get a write off? I'm not 100% sure how much I'll be driving. I was given a list of cities that my facilities may be located. The cities ranged from 5 miles from my home to 65 miles away. I currently drive 40 miles to work (not daily, 7-8 shifts every 2 weeks)
You can still take it as a deduction but very few people are disciplined enough to bank the deduction. You also need to get clarification from an accountant about the $4k I remember having to file a different schedule.

You can't deduct going to your office. What I mean by that is if my office is located in Smithville 10 miles from my house, I can't deduct my 20 mile R/T commute to & from. But if my employer sends me to the satellite office in Mayberry 15 miles away from my office, I can deduct the 30 mile trip there.
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Old 25th November 2017, 9:30 AM   #9
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Salparadise:
Exactly, that's why my family instructed me when i bought the car to pay it off in under 4 years if I plan to keep it.

I feel like if I drove my old car (Toyota) everywhere and never had any "big" maintenance issue until the car hit close to 200k miles. The biggest issues I've ever had with my old car were the radiator and thermostat. Otherwise, I was very good about doing my regular maintenance and driving responsibly.

Yeah I didn't think a second car would save me money. But my brother kept telling me to just go pay $2k-3k cash for an old car. I feel like by the time I do that, pay for taxes and maintenance on an old car, that's well earned money I could have just put into my quality Subaru.

I'll call Tuesday and try to get an estimate of my miles but I doubt they'll have a concrete number for me. The company approaches large nursing homes to offer the companies services, sometimes the homes can change.

I guess I'm driving on their time after my 6 month probation period since I'll get paid per patient encounter then. I get a guaranteed 90k during the first 6 months (same as my current salary at the job that fired me) after that I get paid per patient. If I see an average at least 10 patients per home I'd make enough to make 90k. If I see more, do some extensive treatments or document in a way to get the full amount allowable by insurance companies I can make well over 90k. The company has some employees making 160k who are seeing an average of 13 patients per facility.......So in a lucrative sense I meant the potential to make way more than I make now. For instance, I'm salary now (90k) , I saw 56 patients by myself in a 12 hour shift yesterday. I don't get paid more for working my butt off, not getting time to eat lunch, and seeing more patients. The clinic is always stressful and busy. I normally see in the 40s per day. The company can't keep providers probably because most leave for better paying and lower stress jobs with less work. I was thinking long run, if I can make 6 figures during my minimum 2 years with this company, I can negotiate a higher salary for my next job.

One of the other jobs I interviewed for is only 15 mins from my house. It's in a specialty I'm very interested in. However, I was never told the salary. I was just told to think of the position like a surgery residency.....which translates to long hours, high stress, and low pay.

I think if I keep asking questions and tell the employer who offered me the travel medicine job I need my accountant to look over the numbers, I can buy a little time to hear back from the other jobs I interviewed for. I just don't want to give up a job and not get an offer from any of the others. I have forgivable student loans so I need to stay employed otherwise I have to pay them all off out of pocket instead of just working in rural areas who need medical professionals.

Donnivain:
In that case, I'm not sure I'd be able to deduct. The actual physical office location is in a different state. I only drive to my assigned facilities. Since they are assigned would those make them "my office"
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Old 25th November 2017, 9:35 AM   #10
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Drive your new car and save the money and use the money you saved to buy another new car when the one you're driving now starts to nickel and dime you.

Or better yet, lease.
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Old 26th November 2017, 10:11 AM   #11
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Drive your new car and save the money and use the money you saved to buy another new car when the one you're driving now starts to nickel and dime you.

Or better yet, lease.
Lease, really?

I was always taught to buy a used car (1-2 years behind) with low mileage, pay off the car loan as soon as possible and drive the car as long as you can. (My last car made it 12 years before it needed something major and that was just a radiator and a thermostat. Since then it's always been just a thermostat issue every few years) With leasing, it seems like you'd be paying more in the long run AND always have a car payment. I'm not into flashy new cars, just something reliable for transportation that isnt going to cost me a fortune to maintain.

I've decided not to buy a second vehicle but am curious as to why leasing is better
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Old 16th December 2017, 6:51 AM   #12
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I've decided not to buy a second vehicle but am curious as to why leasing is better
Because you can write off the amount you use it for work related purposes.

So if you use it half the time for work you can deduct half your payment each month. You won't get that deduction if you own.

But you should probably check to see that you'd still be able to get that deduction under the new tax code. I hear it's not too friendly to the working class. Their only benefit is their 401K and most of us know how volatile that can be.
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Old 16th December 2017, 8:19 AM   #13
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I've decided not to buy a second vehicle but am curious as to why leasing is better
If you drive a lot, but not too much so as to not exceed the allowed mileage caps, leasing can be better because you get a new reliable car more often. For example if you were a local realtor, you need a nice car because you are putting people in it. The capital outlay to buy a new car every 3-4 years is cost prohibitive but you can't very well put prospective customers in a 10 year old car no matter how well maintained.

If reliability is the key factor here the option for a new car every 3 years / 30000 miles through a lease is valuable.
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Old 16th December 2017, 8:31 AM   #14
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Lease, really?

I was always taught to buy a used car (1-2 years behind) with low mileage, pay off the car loan as soon as possible and drive the car as long as you can. (My last car made it 12 years before it needed something major and that was just a radiator and a thermostat. Since then it's always been just a thermostat issue every few years) With leasing, it seems like you'd be paying more in the long run AND always have a car payment. I'm not into flashy new cars, just something reliable for transportation that isnt going to cost me a fortune to maintain.

I've decided not to buy a second vehicle but am curious as to why leasing is better
Leasing is NOT necessarily better. When you lease you're basically paying for depreciation while using the car... plus the time value of the money, administrative fees, and a healthy profit for the dealer and manufacturer. They go to great lengths to disguise the actual cost and make it difficult to do a dollar-for-dollar comparison. You pay dearly for convenience, and you'll be limited to a certain number of miles, etc.

Leasing can make sense under certain conditions... if you know that you'll be trading every 3-5 years anyway, and are willing to pay whatever it costs to always be driving a newish model, and the limited mileage is not a factor.

When you buy a new car and drive it off the lot, you're what is called "upside down" for a few years. That means you have negative equity, or owe more than the car is worth. If you try to trade it in while you're upside down, you have to either pay it off first or roll the difference into the new loan, making you payment on the new car higher than if you had bought it straight out, without a trade-in.

Leasing eliminates the upside down problem. How? Because you'll be paying enough (monthly) to cover all of the depreciation, and then some, over the term of the lease. Do the math.

Yes, formatting the costs this way can allow you to deduct more than the standard mileage rate... but you'll also be paying more than the standard mileage rate to operate the car.

Again, the reason the employer prefers to pay you a fixed amount for the use of your car is because it's a lot cheaper than providing a car... and guess who is making up the difference!
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Old 16th December 2017, 11:02 AM   #15
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Leasing is never ever a good idea to me. Paying rent for a car you'll never own.

Your Subie has one of the highest resell retention rates.

I own three of them and they are also somewhat expensive to repair. Parts are everywhere though.

$4000 might enough...but you need to find the expected mileage first.

IF you replace the most common stuff every year, timing belt, tires, oil changes, transmission and head gaskets every 5 years, typical suspension consumables, and pay a shop to do to it, you're going to be real close to that $4000/yearly but you will also have a very well maintained car capable of 300k.
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