I am expecting a job offer for what is basically a delivery driver position. I would be using my own vehicle. There had been talk about getting reimbursed for mileage but now it's going to be a flat rate.

I do not currently own a car. Where I live has very good public transport. I'm wondering, how what calculations are involved in knowing how much I would make after the expense of the car?

Obviously having a car would help in other areas of my life, including other jobs. Where I live it's very common people to have a "side hustle" (such as a Skip the dishes delivery, Uber driver etc). I already have gig connections that would result in more work with me having a car. Right now I am looking for more work.

  • 1
    How much driving experience do you have? In the US, you would have to have liability insurance on the car (plus C&C if you financed it). Depending on your age, sex, driving record, and the particular car, this could be quite expensive.
    – jamesqf
    Oct 16, 2021 at 4:28
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    It should be possible to work out the main costs. There are many different ways of acquiring a car (buying new may come with warranty and included insurance/servicing/etc, or long-term leasing is another option), all of which have different costs. You should be able to sit down and work out the costs, but there is the risk of e.g. a serious mechanical fault which can't be accounted for, or even if it's under warranty the expense to you of it being off the road.
    – Stuart F
    Oct 16, 2021 at 12:05

2 Answers 2


"There has been talk about being reimbursed for mileage" - assume this will never happen. If they would offer it, it would be in the initial contract. They are stringing you along with this, and I would personally consider it a red flag that they would suggest a hypothetical benefit that they won't commit to now in writing.

Assume at bear minimum as a rule of thumb that each km of driving will cost you the CRA's deductible rate of $.59 / km [theoretically considers gas, depreciation of your overall car expense, insurance, etc.]. This number has an inflation range tied per year, but given how volatile gas & insurance costs are, consider this an inaccurate starting point. If you were driving just 100km a day, this would mean a roughly $59 additional cost to your day. You absolutely need to know how much driving would be expected of you before you could even begin to calculate costs.


The cost of a vehicle is composed of the following:

  • Purchase price, or down payment if financed
  • Taxes and fees due at closing
  • Monthly payments if financed
  • Insurance costs
  • Maintenance costs
  • Fuel
  • Taxes and government fees (vehicle registration, etc)

If you're in the US, you can deduct many of the costs above on your income tax returns, but most people simply take the mileage deduction, which is rather generous at $0.56 per mile for 2021. Deducting actual costs requires itemization and calculating depreciation, but the mileage deduction only requires documentation of the miles driven for business purposes. A simple log book will suffice.

There are lots of tradeoffs to be made. For example, a new car is far more expensive up front, but maintenance will be lower. It should be zero except for expendables like tires, batteries, etc. during the entire warranty period. Maintenance on a new car should be little more than oil changes, replacement tires, etc.

Financing also has a lot of tradeoffs. You'll be required to provide collision and comprehensive insurance, which can be expensive depending on the car, your age, your gender, and your driving record. If you're a single male under 25, anticipate it to be quite expensive. However, going without that insurance coverage, particularly comprehensive, is a risky bet. Somebody steals your car? Tough luck, you're out the money. Ditto if you skip collision insurance, you damage the vehicle in a crash, and it's judged to be your fault or the other driver is uninsured. If you've also got some moving violations on your record in the last few years, expect it to get more expensive. If you have major things like a DUI charge, expect it to be almost impossible to obtain insurance at all.

If you have a good credit record, auto manufacturers often offer very attractive financing options on new (and sometimes "certified" used) cars, sometimes even 0%. But don't expect to negotiate much off the purchase price if you're depending on dealer financing.

So how do you find out all these numbers? First, decide what sort of car you need, then go online to some of the car sites like cars.com, Edmunds, etc. Get an idea what vehicles best suit your needs and what they cost. Then call or go online to at least three insurance companies and ask for quotes on those cars. If you're going to need financing, go to any of the financial sites like bankrates.com and find out what new and used car loans cost.

Don't forget used cars. This is likely to be your best deal, but buyer beware. How much do you know about cars? You can get some great deals buying directly from another individual or dealer, but if you don't know a reliable mechanic who can inspect it for you, you need to find one first. Add his fee to your cost (should be 1 hour of his standard rate).

The absolute last place you should visit in your research project is a car dealership. Trust me, they spend their days selling cars to unknowledgeable people, and they will win if you haven't done your homework. They will lie to you. They will stroke your ego. They will tell you that you have to make a decision today, which is just another lie. Don't get near an auto dealership until you're kind of an expert on the car you want to buy.

NOTE: I ignored leasing options in my answer because those can get very complicated and are rarely a good choice unless you expect to keep the mileage low and plan to replace your car with a new one every few years. It doesn't sound like that's what you're looking for.

  • Cost includes "Monthly payments if financed" ? Well, then the car is depreciated to zero value at the last payment. But if the car were bought with cash then there must be a regular depreciation in value. Now on a profit/loss sheet only the interest on the car loan is an expense but then there must be a regular depreciation which is an expense.
    – S Spring
    Oct 16, 2021 at 23:04
  • @SSpring I was trying to keep this simple for someone I don't believe to be fluent in accounting procedures. Oct 16, 2021 at 23:11
  • Yeah, the mistake the Uber drivers make is to ignore depreciation and only account current cash flow. But the car is depreciated to zero value at the last payment and that's good enough if the earnings are good enough.
    – S Spring
    Oct 16, 2021 at 23:16
  • Insurance premiums may be higher if the insurance company knows you're driving your car for work.
    – shoover
    Nov 16, 2021 at 3:27
  • @shoover I believe the ride share companies provide their own insurance that covers the business use of your car. They would have to because I'm certain every auto insurance policy I've ever held specifically excluded carrying public passengers for hire. Nov 16, 2021 at 5:10

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