How Much Should We Spend on Car?

LFrisco2018 on 25/11/2019 - 09:26
Last edited 25/11/2019 - 09:28

So I am 7 months pregnant due to go on mat leave in 2 months. (First baby) Husband has been unemployed since mid Oct, been applying for jobs got a few interviews but no luck so far.

We need a new car because husband wants to do Uber in between and the requirements for an Uber car are (VIC) ANCAP 5 star and less than 10 years old. Our car Suzuki Alto 2011 is 4 star. Also a larger and safer car is preferable for the baby too.(would love an SUV for the safety and husband doesn't like the look of Hatch but we can compromise on those of course)

Anyway we have about 20K cash savings which we don't want to spend all on a car but we would like to avoid car loan if poss.

So we are looking at a car that meets;
ANCAP 5 star
2015 or newer
Fuel economy 7L per 100km or less
Avoid small cars (mirage, swift, yaris etc, as we need to seat 5 adults comfortably plus maybe luggage for Uber)
Avoid European cars, Ford and Holden (high maintenance cost for Euro and my mechanic thinks Ford and Holden are not as good as Euro, Japanese or Korean except maybe a few specific models)

Is this a good list?

Considering all the factors how much should we spend on a new car and which one would you recommend? We saw Hyundai Accent 2015 for 10K which we are not too nuts about (design etc) but ticks all boxes for Uber and gives us potentially 5 years of Uber driving as a back up or second job.

Also we heard that it's better to obtain an ABN, register with Uber and then buy from a dealer so we can claim GST later as opposed to buying privately. What are your thoughts on this?

Also my understanding is that novated please car cannot be used for Uber. Is this correct. Because I could salary sacrifice a car through work too.

Thank you in advance for your help

Financial Car

Comments

  • 87percent on 25/11/2019 - 09:32
    +35

    Personally, if you’re on mat leave and your husband is unemployed, a car is the LAST thing you should be buying

    • wiipantz on 25/11/2019 - 09:41
      +2

      ^ The real MVP

    • Bad Company on 25/11/2019 - 11:28
      +3

      Well said.

      I mean, if OP's happy to splurge their precious savings on a car so OP's husband qualifies for a low income casual job, a.k.a. Uber, why doesn't OP's husband just get a low income casual job in the first place and save the money.

      It's not meant to last forever after all.

      By the way OP, do you own the house or do you have to pay rent? $20,000 doesn't last that long if renting.

  • trex on 25/11/2019 - 09:37
    +1

    Keep it simple. Don’t go for ABN and novated lease as it’s simply not worth the cost and these are long term commitments. With 20k in the bank and a baby on the way, I cringed at the idea of buying a second car. If really Uber is the only way to get a second income, you should consider selling the first car and keep your costs low. Be prepared that whatever is earned from Uber gets spent on the new car running costs (insurance, fuel, servicing) and purchase.

    • Htu08 on 25/11/2019 - 10:59
      +2

      The tax consequences unfortunately aren't so simple.

      The uber subcontractor will need to have an abn and register for GST (gst reg is a requirement of uber).

      Keep this in mind in relation to abn rego

      novated lease doesnt work because a novated lease implies through the stat dec method taht the car is used 20% business.

      one thing to note is that a logbook must be kept for private vs buisness if you wish to claim car deductions.

      please look into it further or contact an accountant or read the ato website.

      • Frisco2018 on 25/11/2019 - 12:32

        Thanks for your advice especially re novated lease

  • Typical16-bitEnjoyer on 25/11/2019 - 09:42
    +10

    Uber should be to supplement a job. Not as a primary job. It's just not viable if you're covering all your own expenses legitimately or driving insane hours. Unless you want him to work the majority/entirety of 2pm Friday to 2am Monday I'd recommend pushing him to keep looking for actual employment.

    • Frisco2018 on 25/11/2019 - 15:19

      How do you know this? Have you done it or do you know anyone who has? I don't mean to be rude, I would like to know

  • [Deactivated] on 25/11/2019 - 10:02
    +8

    Spending any of your savings on a car to Uber is a terrible idea.

    I would cut every cost I could until your partner finds a job. Uber may have been viable if you already had a suitable car paid off, but buying one when your in a risky situation (insecure employment + baby) is financial suicide.

    • Frisco2018 on 25/11/2019 - 14:59

      How do you know that Uber may be viable? Have you done it or do you know anyone who does it? I genuinely want to know.

      • Love a bargain on 25/11/2019 - 16:57
        +1

        There's been a number of articles/ news stories written on how much people really earn from uber. Just google it.

        • Frisco2018 on 25/11/2019 - 21:50

          Thanks, but I was actually asking for any info you may have from your personal experience.
          If we sell our current car and buy a new car cash, it is the same as "paid off". do you think it is then viable as per your logic?

          • [Deactivated] on 26/11/2019 - 07:13

            @Frisco2018: I meant if you already had a suitable car, it would only cost you the start up fee's to find out it's a waste of time. Not thousands of dollars.

            It sounds like you and your husband want a newer car and you're using Uber to justify it. Wait until he gets a job and then 'invest' in a depreciating asset.

            • Frisco2018 on 28/11/2019 - 08:22
              +1

              @[Deactivated]: Ok I see what you meant. Sorry no I was trying to have a better understanding of your point. Money-wise we never wanted a new car, we even bought a small car seat to fit in Alto but the possibility of Uber popped up and started considering. Thanks for your input anyways.

  • Hithere on 25/11/2019 - 10:12

    At this stage not a good idea getting into debt for a car that may or may not make you a livable profit as a Uber vehicle.

    However if you choose to go ahead first see an accountant who is qualified give you personalised information as to the viability of your plan.

  • Ocker on 25/11/2019 - 10:18
    +7

    Living beyond ones means it would seem to me.

  • sweefu on 25/11/2019 - 10:20
    +5

    I think the comments above are correct - i wouldn't spend money on a car at this point.

    However, if you have to, I would:

    1. Sell your current car, hope to get $5k

    2. Buy something like this for ~$12k: https://www.carsales.com.au/cars/details/2015-toyota-camry-a…

    • Mokr on 25/11/2019 - 11:47
      +2

      Fuel Consumption Urban 10.9 L/100km

      Hard to find fuel efficent cars for urban driving, but 10.9 seems a bit high for uber.

    • Frisco2018 on 28/11/2019 - 08:26

      That's one of our ideas as well. Thank you for researching too

  • Mechz on 25/11/2019 - 10:25
    +3

    Ford Territory diesel 2015 ish. Should be able to get one for less than 13k. Great for the growing family, cheap on fuel and uberable.

  • Cheeper on 25/11/2019 - 10:28
    +5

    Consider… that you will be outlaying say $10,000 for another car, i assume your comprehensive insurance would increase as well and the extra expense for fuel and car maintence. All of that will need to be achieved as income before you benefit 1 cent from your Uber adventure. Better to focus on getting a job, any job..

  • Frisco2018 on 25/11/2019 - 10:52
    +1

    Sorry forgot to mention we are willing to sell the current car

  • Some Human on 25/11/2019 - 11:07
    +5

    I don’t mean to sound like a prick, but how hard is it to get a job? Is he aiming too high? If so, can he not take a low income casual job in the meantime until he finds something better?

    • Bad Company on 25/11/2019 - 11:23
      +2

      Not sure why people are down voting you.

      Getting a casual low income job is still way better than spending your precious savings on a car so you can qualify for another casual low income job, a.k.a. Uber.

    • Mokr on 25/11/2019 - 11:34
      +3

      the rationale is the husband will still be applying for jobs, if he gets a part time low wage job then he will have to leave it as soon as he finds new work.

      Probably if he looked for cleaning jobs or casual work on air tasker it might be better + cheaper upfront costs.

      • Bad Company on 25/11/2019 - 12:02
        +3

        Probably if he looked for cleaning jobs or casual work on air tasker it might be better + cheaper upfront costs.

        Absolutely.

        The ~$10,000 investment on a new car will take months of Uber driving to recover. Simply not worthwhile as an interim option. Unless hubby wants to semi-retire and just do some casual Uber but it doesn't sound like that's the scenario.

    • sheamas88 on 25/11/2019 - 12:17
      +4

      It can actually be harder to get casual, entry-level jobs when you have a degree/training/career already because the employers know you will be looking for other jobs and opportunities the whole time you are working for them.

      They know you are only looking at their job as a temporary measure and they don't want the risk that you will leave in the next month or so when they can get someone who is more likely to hand around for a few years.

      • Frisco2018 on 25/11/2019 - 15:02

        This.
        And the fact that holiday season is approaching.

  • JIMB0 on 25/11/2019 - 12:16
    +3

    Camry Hybrid.

  • brad1-8tsi on 26/11/2019 - 08:51
    +3

    Has your husband considered approaching some taxi owners and seeing if they will commit to some shifts if he gets his taxi licence?

    would love an SUV for the safety

    This is a fallacy. They are less safe than a normal sedan (SUV has a higher centre of gravity, doesn't handle as well and is more susceptible to rollover).

    Avoid small cars (mirage, swift, yaris etc, as we need to seat 5 adults comfortably plus maybe luggage for Uber)

    In Sydney, having a small car doesn't seem to be an issue for Uber drivers. They are pursuing the lowest running costs.

    How long do you intend to be on maternity leave for? When we had our kids my wife was on 2x my income. We saved some money beforehand but 9 months was the longest she could take off unpaid while we slowly went backwards on my wage. I was Mr Mom from 9 months old-12 months. It was the best thing ever and made a bond with my kids that has endured. So maybe your husband needs to take up the primary carer role?

    • Frisco2018 on 28/11/2019 - 08:25

      Thank you, you've raised some interesting points for us.

  • malich on 28/11/2019 - 15:00

    If this is the path he definitely intends on going down, then it's worth looking into a used Prius V. You should be able to get one for around the $20k mark.

    Being a 7 seater it qualifies for Uber XL & has excellent fuel economy.

    Good luck to you both

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