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Tuesday, May 6

How I Track the Expense for the Purchase of a Vehicle

At the end of April I purchased a 2011 Chevrolet Aveo from Hertz.  I spent a total, including taxes and fees, of $9,370 on the car.  The car has just short of 60,000 miles on the odometer, and a few years ago I decided my vehicles' useful life would always be 100,000 miles for purposes of this exercise.  Therefore, each month I will post an expense in Quicken the the number of miles I have driven.  The per mile factor I will use is $.23425 (a little more than 23 cents).  All I did to come up with that was divide my purchase price by the 40,000 miles remaining for my vehicle's useful life.

As an example, if I drive 1,000 miles in May, I would deduct $234.25 from Quicken as a vehicle depreciation expense.   I'll keep doing that until I hit 100,000 miles; any mileage after that is "free" since the vehicle will be completely depreciated at that point.