Purchasing Vehicle; Charging km for work?

[importracer]

Hey Beyond,

What is your thoughts on using a personal vehicle for work, and charging back Km? I would be required to travel anywhere from 800km to 2000km/month; and the KM charge back would be the standard 54 cents/km for the first 5k and 46 cents after that. I would be responsible for paying insurance, fuel costs, maintenance, wear and tear etc.

I am looking at purchasing either a Truck or Suv in order to do the above. What is the best route to make this work in my favour?

I am thinking of the below options:

1. Purchase a used truck with relatively low km. My budget would be about 30k and would be paying outright if going this route

2. Purchase a new truck and finance it; looking for something with low interest rate if possible.

3. Lease a truck, not sure if this option would be feasible, or if I would end up paying more in km driven/potential damages upon returning the vehicle.

Am I out for lunch thinking any of the above can work in my favour, and off-set depreciation with the km charge back?

Any input is appreciated.

Thanks!

[ShermanEF9]

I currently use my vehicle for work and charge mileage. If I did it all again, i would buy a used but efficient vehicle to maximize the return from the mileage. It might seem worth it, but in the end the mileage does not cover my costs completely.

[SKR]

If your job is going to wear out your vehicle for you, what they're compensating you needs to be enough to pay for the whole thing. At least that's the way I see it.

If there's any way for them to supply a vehicle for you, that's what I would recommend. I wouldn't look at that 54/46 cents as a money-making venture. If it's necessary, buy the cheapest, most reliable vehicle you can. Leasing might be a good option in this situation, but I think in that case it's even more important that your reimbursement is enough to cover everything. At least if you're putting your own money in on something you own, at the end you own a vehicle that still has some value, even if it's just scrap. With a lease that money is gone.

[ExtraSlow]

Another way to approach this is buy a vehicle that's as close to whatever you need for your life outside of work and look on anything the company pays as a bonus.

If is really handy if you'd probably drive an SUV or truck anyway.

[jwslam]

Not really answering your question, but other things to consider

Pro's
-They're essentially giving you tax-free dollars towards a car you would've paid for anyways
-No need to have room for a personal and work vehicle
-You're spending so much time in this, it may as well be something you chose and love.

Con's
-Tracking km for work vs km for personal may start becoming tiresome; there are apps for that though I believe
-You're putting on thousands of km onto a car you may have babied
-You're stuck with this on the off chance you are no longer employed with them
-Any collisions you may have while driving for work will be on your insurance, which have long-term consequences *this one is the biggest one I think, especially because you're driving so much more* (I'm not calling you a bad driver who will be in a collision, but there are too many people who are on the road that shouldn't be)

Semi Off-Topic considerations
-Is the driving time-sensitive? What if you're older truck breaks down and you're unable to arrive on time? Will the company put you liable for lack of maintenance of your vehicle?
-Is the company providing you with a work cell phone, or compensation for your cell phone? (for if/when you get stranded)

[Abeo]

Depends on the type of driving. When I was doing it, I was just going to Edmonton and back, and made more money per hour driving than I did doing my job. It put on miles and minimal wear, but the truck was so new and fuel efficient that it didn't matter in the grand scale. If it were going down lease roads, then it would be a totally different beast.

[Tik-Tok]

Personally, until I knew the job was definitely going to work for me, and has a slim chance of a sudden layoff, I would buy a used vehicle.

[Xtrema]

Personally, until I knew the job was definitely going to work for me, and has a slim chance of a sudden layoff, I would buy a used vehicle.

This. But the trick is reliable enough that you ain't missing work because of it or have too much repairs to ruin the pay out.

[Mitsu3000gt]

It doesn't seem like $0.46/km would offset the deprecation of a typical truck as the KM's skyrocket, but I could be wrong. I'd probably lease if I could find a deal one one (I imagine residuals on trucks are poor though).

Can you use a regular car or does it have to be a truck? You could lease something for under $300/mo and make money on the KM's.

[HiTempguy1]

This. But the trick is reliable enough that you ain't missing work because of it or have too much repairs to ruin the pay out.

I drive over 50k kms per year, lots of that towing trailers with multiple cars on it, all with higher mileage trucks.

Never, not once, in my 14 years of towing on a regular basis, have I had a vehicle break down catastrophically on me. The most serious issue has always been alternators and flat tires.

So if OP is buying a maintained vehicle with under 200k kms on it, any concerns are incredibly overblown of it magically "breaking down". He isn't talking about buying a german/luxury SUV (as far as I can tell) I'd be more worried about lemons (getting stuck in dealer hell trying to get flaky shit fixed).

OP, we really need more information on what job you are performing to determine what the vehicle entails. The two ways to maximize your $$$ have already been stated though. Pay the least amount of money possible for the vehicle that fits the bill and drive it into the ground, or buy a vehicle that pleases you personally and accept the money as a tax-free bonus (that for the most part will cover your costs of owning the vehicle).

Edit-

It doesn't seem like $0.46/km would offset the deprecation of a typical truck as the KM's skyrocket

The maximum km he'd put on for work would be 24k per year (the absolute maximum), and he would be paid $12,000 for doing so, 50c/km certainly pays for that plus fuel and maintenance. That's not outside the normal boundaries of daily driver usage. On top of that, as ExtraSlow has demonstrated in his cheap travel trailer hauler threads, modern trucks tend to bottom out around $8k-$10k no matter the mileage unless they are literally falling apart with rust holes.

You can get crew cab base model 4x4 trucks for $28k-$30k. Options make no difference on resale if you drive it into the ground.

[vengie]

Buy a 2008 Jeep Grand Cherokee CRD.
Pre-emissions (No DEF), average 25 MPG on the highway, AWD (GREAT in winter), they will last a very long time and are quite reliable.

Many can be had for $10,000-$15,000.

[Strider]

I was in the same boat when I was a new grad (except I was getting paid oilfield km allowances). I ended up buying a used 4Runner and had probably the best possible outcome. It was super reliable and cheap to maintain. I changed jobs a year later and sold it for more than I paid. Would've hated being stuck in a lease on a truck for another 4 years.

[TYMSMNY]

figure out what is needed for work (truck or is a car ok).

Think of it as a subsidized car (not in terms of loss or profit). buy something you like and drive it.

[TomcoPDR]

figure out what is needed for work (truck or is a car ok).

Think of it as a subsidized car (not in terms of loss or profit). buy something you like and drive it.

What about a Porsche coupe to deliver for Intelcom.

[TYMSMNY]

What about a Porsche coupe to deliver for Intelcom.

sure why not! maybe a GT3 to get Pho takeout, or a Panamera Turbo to cater an event. I'm sure it's all been done.

[ShermanEF9]

if you do buy a vehicle for work, buy something you don't care about. i have all sorts of scratches and dents on my vehicle that was purchased in march of this year. i am pretty unhappy about it.

[RealJimmyJames]

How fucking bad at math do you need to be to even have questions about this?

[importracer]

Thanks for the responses so far guys.

To answer a few questions/clarify:

-It does need to be an SUV or Truck
-I would be mainly highway driving, with the exception of a few lease roads
-I am required to travel 25% of the time, approximately 5 days a month
-I do want a truck for a personal vehicle; hence I am entertain the idea. I just don't want it to end up costing me more in the long run for using it for work
-It will not be used as a "work truck" per say, so I am not too worried about cosmetic damages(other than rock chips etc)

As others have mentioned, I am not looking to make a ton of money off of this, simply subsidize my vehicle.

Based on the additional information, what option would you guys suggest from the above?

[SKR]

I think I'm going to stand by what I said the first time, but my issue is more a philosophical one than a financial one. I want my personal vehicles to be nice. I want them to be clean and quiet, and modified the way I want it to be. That's not possible if I'm also using that vehicle for work, and so compensation must be 100% or it's not worth it to me. It would be one thing if I was in and out of it with street clothes, but coveralls and muddy boots and pipe dope and gloves and shit all over, fuck that. When I went from being an employee to a consultant, I even went and bought a second truck because having one nice vehicle was that important.

If you don't look at it that way, if a truck is a truck and it doesn't matter if it stays nice, or you already have a nice vehicle, then go for it.

[The Cosworth]

Can't believe I am posting this.... but this is older age for you.

I'd buy a used Accord, Ford Fusion, something sedan sized. $6-$8k. Run that daily. Use the money you save to pay off the car and pocket some. Use that to buy a fun car you don't ruin and wear out. I expensed a truck for 2 years. I paid it off but I wore the thing out and even then gas was much cheaper. If you don't need or want a truck, make the $900 a month, pay off the $250 a month car with insurance. Add gas. Pocket $500 a month.

[ExtraSlow]

Get yourself a three year old escape for fifteen grand. Buy good tires for it. Profit.