Purchase Vehicle to Uber

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Purchase Vehicle to Uber

Kevin Phu
Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes

So an idea crossed my mind and I've done a little thinking about it. Wanted to see what the community's opinion is on it and if they feel it could be a good idea.

General Info on my situation:

Primary vehicle: No payments but can't use as Uber (it's heavily modified)

Debt: ~9k in CC (0% apr/21 months due to balance transfer)

RE Goal: Build capital ASAP to put myself in good position to purchase

Overall Budget: I make good money and after bills/expense I still have a lot left over

I was thinking about purchasing a economical vehicle to double as my daily driver and Uber on the weekends for extra income to put towards RE goal. I was thinking about a used Honda Accord for $10-13k. I would finance it with 0% down at a low rate (around 3.9%) and use the weekend Uber Money to cover payments and insurance. Adding this 2nd vehicle to my policy would increase my insurance premium about $20/month. 

$13k loan at 3.9% over 60 months = $238.83/month

Insurance = ~$20/month

Overall cost per month (excluding gas) = ~$250

I would be driving in my local area (Ventura county) but could also drive 45 minutes away into Los Angeles. I also travel down to San Diego frequently for work so I could also Uber drive there as well.

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Arlen Chou
Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
9y

@Kevin Phu I totally believe in the power of the side hustle.  There will be a ton of people who will say "your time is worth more" networking, looking for deals, etc etc.  But those activities are fairly limited...  Driving an Uber for extra cash is what the side hustle is all about; you can do it whenever you have extra time.  You also are forced to drive neighborhoods and learn the lay of the land.

About buying a 2nd car... I personally would sell the "boy toy" and suck it up and roll with the 4 door as my only ride.  Dumping money into a pimped street ride is a waste of money, unless you are going with something that is collectable.  I know, because I now cry about all of the money I have blown on various cars.  Just keep in mind that once you have a ton of cash you will be able to buy better toys.

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  • Arlen Chou
    Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
    9y

    @Kevin Phu I totally believe in the power of the side hustle.  There will be a ton of people who will say "your time is worth more" networking, looking for deals, etc etc.  But those activities are fairly limited...  Driving an Uber for extra cash is what the side hustle is all about; you can do it whenever you have extra time.  You also are forced to drive neighborhoods and learn the lay of the land.

    About buying a 2nd car... I personally would sell the "boy toy" and suck it up and roll with the 4 door as my only ride.  Dumping money into a pimped street ride is a waste of money, unless you are going with something that is collectable.  I know, because I now cry about all of the money I have blown on various cars.  Just keep in mind that once you have a ton of cash you will be able to buy better toys.

    2Reply
  • Kevin Phu
    OP
    Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
    9y
    Originally posted by @Arlen Chou:

    @Kevin Phu I totally believe in the power of the side hustle.  There will be a ton of people who will say "your time is worth more" networking, looking for deals, etc etc.  But those activities are fairly limited...  Driving an Uber for extra cash is what the side hustle is all about; you can do it whenever you have extra time.  You also are forced to drive neighborhoods and learn the lay of the land.

    About buying a 2nd car... I personally would sell the "boy toy" and suck it up and roll with the 4 door as my only ride.  Dumping money into a pimped street ride is a waste of money, unless you are going with something that is collectable.  I know, because I now cry about all of the money I have blown on various cars.  Just keep in mind that once you have a ton of cash you will be able to buy better toys.

     I don't intend on doing this forever. Probably for about a year. I recently moved to a new city, transitioned out of the military and started a new job so I feel a year is a good window for me to establish a steady history of employment for financing purposes and to also get a feel for my local market. I do not feel like I am in any position to dive in my local RE market yet so I'm not really in a rush.

    As for the "boy toy", that's something that I will not let go. Cars are a big hobby of mine and probably will be for my entire life. If we spend our whole lives chasing money and not also indulging in the things we love then what's the point really? To each their own!

    0Reply
  • Jason BottPro Member
    Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
    9y

    @Kevin Phu you will want to confirm your insurance #.  There is a charge above and beyond your personal auto insurance for Uber.  It can be a large amount depending on if your insurance company will allow you to add it to your policy.

    Good luck

    0Reply
  • Kevin Phu
    OP
    Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
    9y
    Originally posted by @Jason Bott:

    @Kevin Phu you will want to confirm your insurance #.  There is a charge above and beyond your personal auto insurance for Uber.  It can be a large amount depending on if your insurance company will allow you to add it to your policy.

    Good luck

     I currently have USAA auto insurance and have lots of discounts available. I ran a quote through my account to add a 2010 Honda Accord to my current policy and got an estimated increase of about $25 for both cars total. I will definitely double check with them though. 

    edit: Ran a quick quote on my existing policy. Rideshare coverage would add ~$6 to my monthly premium.

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  • Lee S.
    Northern, CA · Member since 2014 · 674 posts · 444 votes
    9y

    did I miss it or did you leave out an important number?  How much will you make as an Uber driver?

    Dave Ramsey would be all for this, im not a worshipper but some short term hard work for long term gains can't hurt.

    I've got two Tesla model 3's reserved, if Elon Musk comes through I'll be able to send them out in the network driverless to do my side hussle for me.

    1Reply
  • Jason BottPro Member
    Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
    9y

    @Kevin Phu to clarify further, Uber is "business" use of a vehicle, which is excluded on a personal policy.  Stand alone policy for "livery" (transportation of people) ranges from $2,500-$7,500 per year.

    0Reply
  • Kevin Phu
    OP
    Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
    9y
    Originally posted by @Lee S.:

    did I miss it or did you leave out an important number?  How much will you make as an Uber driver?

    Dave Ramsey would be all for this, im not a worshipper but some short term hard work for long term gains can't hurt.

    I've got two Tesla model 3's reserved, if Elon Musk comes through I'll be able to send them out in the network driverless to do my side hussle for me.

     Based off of what I've gathered from people that I know who Uber/Lyft in Los Angeles/San Diego as a weekend hustle, they make about $300-400 driving for about 12-14 hours per weekend.

    0Reply
  • Kevin Phu
    OP
    Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
    9y
    Originally posted by @Jason Bott:

    @Kevin Phu to clarify further, Uber is "business" use of a vehicle, which is excluded on a personal policy.  Stand alone policy for "livery" (transportation of people) ranges from $2,500-$7,500 per year.

     From what I can see from USAA's site, adding rideshare coverage (specifically explained for doing things like Uber/Lyft) to my policy covers me whenever I use my personal vehicle as a rideshare.

    edit: Also, it looks like Uber themselves cover the livery insurance.

    0Reply
  • Lee S.
    Northern, CA · Member since 2014 · 674 posts · 444 votes
    9y
    Originally posted by @Kevin Phu:
    Originally posted by @Lee S.:

    did I miss it or did you leave out an important number?  How much will you make as an Uber driver?

    Dave Ramsey would be all for this, im not a worshipper but some short term hard work for long term gains can't hurt.

    I've got two Tesla model 3's reserved, if Elon Musk comes through I'll be able to send them out in the network driverless to do my side hussle for me.

     Based off of what I've gathered from people that I know who Uber/Lyft in Los Angeles/San Diego as a weekend hustle, they make about $300-400 driving for about 12-14 hours per weekend.

    Not terrible.  Does that include fuel and depriciation of the vehicle?

    0Reply
  • Kevin Phu
    OP
    Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
    9y
    Originally posted by @Lee S.:
    Originally posted by @Kevin Phu:
    Originally posted by @Lee S.:

    did I miss it or did you leave out an important number?  How much will you make as an Uber driver?

    Dave Ramsey would be all for this, im not a worshipper but some short term hard work for long term gains can't hurt.

    I've got two Tesla model 3's reserved, if Elon Musk comes through I'll be able to send them out in the network driverless to do my side hussle for me.

     Based off of what I've gathered from people that I know who Uber/Lyft in Los Angeles/San Diego as a weekend hustle, they make about $300-400 driving for about 12-14 hours per weekend.

    Not terrible.  Does that include fuel and depriciation of the vehicle?

     Does not include gas but on average it costs about 25-40 per day depending on how much time is spent driving. Downtown areas are very hot for this service for obvious reasons and price surges add a nice bump to the income.

    0Reply
  • Jason Chen
    Flipper · Irvine, CA · Member since 2015 · 7 posts · 3 votes
    9y

    I suggest you to uber around downtown Santa Barbara on weekends. I used to do that. You can easily can $200+ per night depends on price surge. Good Luck!

    0Reply
  • Kevin Phu
    OP
    Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
    9y
    Originally posted by @Jason Chen:

    I suggest you to uber around downtown Santa Barbara on weekends. I used to do that. You can easily can $200+ per night depends on price surge. Good Luck!

     Definitely would be an option seeing as I'm somewhat near it! How frequent were the ride requests? I haven't been up there before so I don't really know how busy it gets there on a typical weekend night.

    0Reply
  • Justin R.
    Developer · San Diego, CA · Member since 2015 · 1k+ posts · 1k+ votes
    9y

    @Kevin Phu Double down and use your Uber driving time for real estate networking. Find a way to chat up your passengers and subtly figure out if they're into REI. Know how you can help someone, then figure out how to parlay that into a relationship you can leverage.

    I love talking REI with anyone who has an interest, and it'd make for a more fun Uber ride. Plus, I don't know, maybe you could offer to drive by someone's properties when Uber leads you there and take photos or checkin for the owner.

    1Reply
  • Dan Krupa
    Real Estate Broker · Phoenix, AZ · Member since 2013 · 749 posts · 399 votes
    9y

    @Kevin Phu normally I would tell you to pay the CC off but this is different. Heck yeah, buy that car! If you are using it to hustle and make money. Have you considered become a real estate agent instead? RE agents are typically working nights and weekends. Learning RE. Seeing the good deals come up first on the MLS, etc... Another great way to hustle and earn some side income. In Cali you can find an online broker who will simply charge you a transaction fee per deal. Plus you could become an agent for USAA and assist military members if there is a base nearby.

    0Reply
  • Kevin Phu
    OP
    Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
    9y

    @Justin R. Definitely crossed my mind!

    @Dan Krupa I currently have a government job that pays very well. I intend on using the pay as a strong and steady source of capital for my future REI.

    0Reply
  • Dan Krupa
    Real Estate Broker · Phoenix, AZ · Member since 2013 · 749 posts · 399 votes
    9y

    @Kevin Phu I am in the same boat. With a good paying govt job...I also am an RE agent. Think it over.  I have learned more being an agent then I could have ever fathomed.  Personally, I don't work with consumers. But that option is available to make some side income.  Best of luck to you. 

    1Reply
  • Walter Roby jr
    Rental Property Investor · Encino, CA · Member since 2016 · 324 posts · 178 votes
    9y

    Both uber and lyft have insurance policies in place for you whenever you are logged into the app. I agree with the above and ditch the boy to for now. I love Hondas and will get back into bigger toys when real money starts rolling.

    If you decide to buy a car specifically to Uber, be aware that you are forcing yourself into a long term situation with the expectation that you will be up to doing uber for a while. In the event you feel like taking off a week or two without other supplemental income your finances may be squeezed.

    I'm in a similar boat and am becoming an agent to act as my side hustle. Lucky for me though my fiance has an uber-ready vehicle in case I get the urge to side hustle on a Friday night.

    0Reply
  • Arlen Chou
    Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
    9y

    @Kevin Phu I hear you about cars.  I started off as an audiophile with all of the stuff associated with it, then moved on to SCCA solo racing eventually to track days all over California.  Cars are expensive hobby still have my '98 993 C4S that is more track car then street car, but I plan to put it back to street mode one of these days.  I am just to old for an over tight suspension, especially on CA streets.  Do the uber and enjoy the side hustle while you can.

    0Reply
  • Kevin Phu
    OP
    Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
    9y
    Originally posted by @Walter Roby jr:

    Both uber and lyft have insurance policies in place for you whenever you are logged into the app. I agree with the above and ditch the boy to for now. I love Hondas and will get back into bigger toys when real money starts rolling.

    If you decide to buy a car specifically to Uber, be aware that you are forcing yourself into a long term situation with the expectation that you will be up to doing uber for a while. In the event you feel like taking off a week or two without other supplemental income your finances may be squeezed.

    I'm in a similar boat and am becoming an agent to act as my side hustle. Lucky for me though my fiance has an uber-ready vehicle in case I get the urge to side hustle on a Friday night.

     My toy doesn't cost me anything besides gas and insurance. I have been considering getting a 2nd vehicle anyways as a daily driver. Even if I felt like taking the entire month off from Ubering, my finances would not be squeezed one bit. 

    My current car does fine as a daily but I'm just seeing if getting a more gas efficient daily could bring some benefits. Looks like it does. Unless I'm missing some points...which is why I have you guys! :)

    0Reply
  • Jaclyn Peyton
    Lake Saint Louis, MO · Member since 2016 · 28 posts · 7 votes
    9y

    @Kevin Phu have you thought about the money you could make wholesaling versus ubering? Im not a fan of one person having two cars unless they are debt free, minus their house. If you can't use your current vehicle to Uber, I'd trade it in for one that you can. You certainly could be pocketing that $250/month to use towards setting up your business and paying off credit cards. The bottom line, how serious are you about cleaning up your debt and getting started in RE? Serious enough to trade in your car? 

    1Reply
  • S. J. Gardner
    Normal, IL · Member since 2017 · 20 posts · 4 votes
    9y

    Personal experience says that buying a second vehicle "just" to uber is a bad idea. Accelerated depreciation puts you right about at break even. However, as many have stated above, leverage is a beautiful thing. Be sure to track and maximize all deductible expenses. Engage in productive conversations. (Just don't be the creepy, salesy, pitchy guy.) And drive for dollars since you're behind the wheel anyway. Keep a pen and notebook handy, as well as your business cards. 

    Happy Ubering to you!

    0Reply
  • Elizabeth Wilson
    Real Estate Investor · Memphis, TN · Member since 2016 · 940 posts · 695 votes
    9y

    @Kevin Phu 

    I've actually thought about Ubering for the non-financial benefits for REI. You get to drive for dollars on someone else's dime and you get to network with folks. I've passed out many a business card to uber drivers and received many in return. Also a away to find folks interested in birddogging for you.

    Additionally, if you just wanted to do it on the weekend, there is a company I recently heard about called http://hyrecar.com/  I haven't worked with them, but I think the concept is cool.  You could rent your car out for the week to another driver.  They cover insurance, etc.

    Best of luck!

    0Reply
  • Jason Chen
    Flipper · Irvine, CA · Member since 2015 · 7 posts · 3 votes
    9y
    Originally posted by @Kevin Phu:
    Originally posted by @Jason Chen:

    I suggest you to uber around downtown Santa Barbara on weekends. I used to do that. You can easily can $200+ per night depends on price surge. Good Luck!

     Definitely would be an option seeing as I'm somewhat near it! How frequent were the ride requests? I haven't been up there before so I don't really know how busy it gets there on a typical weekend night.

     Very busy on weekends. Constant request.

    0Reply
  • Kevin Phu
    OP
    Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
    9y

    @Jaclyn Peyton @Elizabeth Wilson @Jason Chen @S. J. (won't let me tag you) 

    Thanks for the thoughts and suggestions.

    So, to be clear, I wouldn't be purchasing this vehicle solely just to Uber. As mentioned in my OP, I had already considered purchasing a second vehicle that was gas efficient that I would use as my daily driver. Uber would be a side hustle to piggy back off of the purchase. 

    As for trading in my current vehicle, no dealer is going to take it in it's current setup. The cost, for me or dealer, of putting it back to stock would not make economical sense. 

    I could sell it in a private sale but I would probably do that after getting the second vehicle. Don't feel like juggling the two transactions to make sure that I don't have a lapse in transportation because I do have to go to work.

    As stated in a previous post, I am in no position to get into REI with the exception of education. This is not necessarily due to finances. I've set an easily obtainable goal of paying off my $9k in CC debt in less than 12 months. The big reason for not being ready is that I just made a huge life transition (active duty to civilian) so I am still trying to get my day to day life all sorted out. Also, because I just started a new job (that also involves almost 60% travel), multiple banks have already told me that they need me to have a longer work record for my current job for a mortgage loan (conventional and VA).

    Overall goal for the next 12 months

    -Pay off CC

    -Establish work history at current job

    -REI education

    -Build capital (Uber would aid in this goal)

    0Reply
  • Christopher Morin
    Flipper/Rehabber · San Francisco · Member since 2014 · 124 posts · 49 votes
    9y

    @Kevin Phu

    Instead of buying, have you considered short term renting or leasing the asset you are looking to purchase?  Do you want to commit to purchasing this business asset?

    Many self-starters like to be minimize their investment risk or commitment due to changing priorities or lifestyle.  By renting or leasing, you can leverage the exact same product, every time, rented on an as-needed basis.  It allows you to divest of unpredictability and most expenses by letting someone else own and maintain the asset.   Having a dedicated vehicle or dealing with unexpected MX can create a liability that traps you in your business.

    Higher end assets are nice because you can branch out.  UberBlack, or a self-branded shuttle or chaufeur service allows a different model than the "Uber-taxi" UberBlack services solicit a higher price point and lower-hassle clientele.  10 hours of work using UberBlack can solicit $600-800. You can either pay your own MX, insurance, turnover fees, or let a company provide you an asset at a fixed rate.  

    I own a company that purchases high end cars such as the Tesla S's, then rents at a consistent and predictable pricing to self-starting business owners desiring supplemental income through Uber, chauffeur services, and shuttle services.

    You could consider using a service that provides you this the same.  PM me if you want details or you'd like us to do some more research on your desired operating area would support an UberBlack rental model.

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