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Ken Northridge Inner circle Atlantic City, NJ 2392 Posts |
I’m interested in your thoughts on how to use your business vehicle in a professional and profitable way.
To be a successful entertainer, it seems to me you have to be willing to travel. I put at least 25k to 30k miles on my vehicle every year. Unless you have an unusual situation, like Silly Billy who travels to his gigs by taxi cab, or you’re a Las Vegas star, I don’t see anyway around it. Here’s the dilemma: If you’re putting 25k to 30k miles on you’re vehicle per year, in 5 years you’re brand new vehicle will have 125k to 150k miles on it. At that point you will either have to buy a new vehicle or start putting significant money into it for repairs. I’ve always chosen to buy a new vehicle for the following reasons: 1. I do not want to put money into a dying vehicle. 2. Older vehicles will eventually completely die without warning, thereby leaving you to disappoint a client, which is not good for your reputation. 3. Older vehicles LOOK old. In other words, if you’re concerned about your image as a successful business person an older vehicle that is falling apart does not enhance that image. The problem with my solution of buying another vehicle every 4 to 5 years is I always have loan payment, and as you know, vehicles continue to increase in price. Of course I add this expense into my show fee. However, I’m just wondering, is there a way to lower your vehicle expenses while keeping your image intact?
"Love is the real magic." -Doug Henning
www.KenNorthridge.com |
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Howie Diddot Inner circle San Francisco & Los Angeles California 3288 Posts |
One reason I am building a bus is because of the very reason you have posted; I don’t want to wear out my personal BMW, or my Tundra Pickup truck by putting excessive miles on them.
The bus is not new so the cost of purchasing it was less, I paid cash for it, so no loan and the mechanical repairs are a onetime outlay, still costing less than a new vehicle. I am plastering it with advertising because I am a children’s entertainer, you on the other hand, performing corporate events will find it inappropriate to place as much advertising; I suggest a small sign on the side of the van I would suggest a good used van for your needs, this would make the van a 100% business write off for fuel, insurance and maintenance and keep your personal vehicle lasting longer and in time you will no longer have car payments |
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Al Angello Eternal Order Collegeville, Pa. USA 11045 Posts |
Ken
You have just explained the price of doing business. I recycle my props, costumes, and transportation regularly. I sold my 2006 car with 120,000 miles on it and traded it in for a 2011 car last year.
Al Angello The Comic Juggler/Magician
http://www.juggleral.com http://home.comcast.net/~juggleral/ "Footprints on your ceiling are almost gone" |
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Mystical Matthew Elite user 468 Posts |
This is a topic I'm really interested in. I'm glad to know we're not the only ones who put a boatload of miles on our vehicles due to business. Our end of the year mileage write-off is insane.
Here's what I've learned from personal research... Doesn't make it right, just what the sources I've studied have to say... 1.) If you're a low mileage driver and want a new vehicle every two years, lease. 2.) If you're a low mileage driver and want to keep your vehicle for a long time, buy new. 3.) If you're a high mileage driver, buy a low mileage used car and drive it until it is no longer financially intelligent to repair it. It seems like you and I would squarely fit into #3. The question is whether or not the extra expense of a new car (IE: New Car Tax) is more than the cost of repairs of an older vehicle. Most of the research I've read suggests it is. As far as whether driving an older vehicle hurts your image, my personal opinion is that people are going to remember my show much more than my ride, but that's just me... |
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Ken Northridge Inner circle Atlantic City, NJ 2392 Posts |
Thanks for your post Howie. Just to clarify, the vehicle I put 25k to 30k on per year IS my business vehicle and I use it almost exclusively for business. Whenever we go out we use my wife’s car which gets 47 MPG.
Your used van idea has some merit, but I think it might create more headaches than its worth. Buying a van with 50k already on it would only last me 3 years or so, and I’d hate to put up the those used car salesmen every 3 years instead of 5! Quote:
On 2012-04-22 12:22, Mystical Matthew wrote: You are probably right about that, Matthew. Maybe its more for my personal pride. LOL.
"Love is the real magic." -Doug Henning
www.KenNorthridge.com |
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TomBoleware Inner circle Hattiesburg, Ms 3163 Posts |
I have in the past leased business equipment because it just made sense at the time. I've never leased a vehicle and I don't know the details, but some say leasing company cars/vans is a better deal. You may want to compare since the vehicle is a big part of the business.
But regardless of what you do, you will most likely always have a car payment. They just don't last that long. That's life. Tom
The Daycare Magician Book
https://www.vanishingincmagic.com/amazekids/the-daycare-magician/ My Blog - https://boleware.blogspot.com/ |
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Al Angello Eternal Order Collegeville, Pa. USA 11045 Posts |
Ken our mutual friend Sam has 250,000 miles on his truck, and he is being nickle, and dimed.
The Great Zucchini rents his car, and has no upkeep expenses at all, but of course Eric does 350 shows a year, and has money to burn. I do wash my car weekly, because my wife told me that for the kind of money I get paid I should look like I'm worth it.
Al Angello The Comic Juggler/Magician
http://www.juggleral.com http://home.comcast.net/~juggleral/ "Footprints on your ceiling are almost gone" |
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Donald Dunphy Inner circle Victoria, BC, Canada 7563 Posts |
Quote:
On 2012-04-22 09:42, Ken Northridge wrote: Ken - I remember listening to Dave Ramsey talk about buying nearly new vehicles outright, with no loans. If you are running a profitable business, you should consider saving up to buy the vehicle, instead of doing loans. - Donald
Donald Dunphy is a Victoria Magician, British Columbia, Canada.
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Ken Northridge Inner circle Atlantic City, NJ 2392 Posts |
Great idea, and that's been my 'plan' for many years. But, life happens and it never seems to work out that way. But you are right, that would cut out wasteful interest.
"Love is the real magic." -Doug Henning
www.KenNorthridge.com |
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Donald Dunphy Inner circle Victoria, BC, Canada 7563 Posts |
Reading some Dave Ramsey books, or listening to his audios, or going to his Financial Peace University Course, or listening to his radio show, might help your motivation & understanding of how to make it happen.
- Donald
Donald Dunphy is a Victoria Magician, British Columbia, Canada.
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Howie Diddot Inner circle San Francisco & Los Angeles California 3288 Posts |
Ken,
Allow me to explain further since you think the idea may have merit, I was thinking of a low mileage van; a van that was out on a two year lease, and returned without excess millage will have about 24, 000 miles on it and usually well maintained. The second route you may take is purchasing a van from a private party that for whatever reason must sell it ASAP, maybe because it is about to be taken back by the finance company; the original buyer has paid the full retail price, taxes and registration fee; in most cases you take over the payments with the finance company’s approval, and it will come with the factory warranty. Just a thought |
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arthur stead Inner circle When I played soccer, I hit 1773 Posts |
Years ago we looked into leasing as an option, because the total cost could be deducted as a business expense at the end of the year. Maybe things have changed, but at that time, the "fine print" revealed that there were mileage restrictions ...
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MickNZ Special user Auckland, New Zealand 576 Posts |
Quote:
On 2012-04-22 12:32, Al Angello wrote: Nice |
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Al Angello Eternal Order Collegeville, Pa. USA 11045 Posts |
Yea Mick
When we first met she laughed at me when she saw me pressing my own clothes. Now every Monday morning I drop a load of dirty clothes off at the dry cleaner.
Al Angello The Comic Juggler/Magician
http://www.juggleral.com http://home.comcast.net/~juggleral/ "Footprints on your ceiling are almost gone" |
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Howie Diddot Inner circle San Francisco & Los Angeles California 3288 Posts |
Quote:
On 2012-04-22 15:26, arthur stead wrote: Yes Arthur, the limit is usually 12000 miles a year, I was not referring to Ken leasing an automobile from a dealer, I was referring to Ken purchasing a low mileage van returned to a dealer at the end of a lease |
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RJE2 Veteran user 383 Posts |
We keep 3 vehicles.
My wife and I each have a personal vehicle (car). We then have a vehicle that is strictly for business. My personal vehicle is a 2002 VW TDI (I bought it new in 02 with only 600 km on it) with over 570 000 km or almost 355 000 miles on it. It still runs great. It costs about $60.00 (with fuel being approximately $5.00 a gallon here) to fill it up when it is almost completely out of fuel and then I get at about 1100 km or almost 700 miles on a tank. The trunk is a decent size and you can easily fit a show's worth of equipment (large stage illusions won't fit of course)into it including sound system. I have regular maintenance done to the car and there are parts that wear out and need to be replaced, but overall, I have never had anything major go wrong on it and cannot recommend them highly enough for people who put a lot of km/miles on their vehicles. |
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Sam Sandler Inner circle 2487 Posts |
AL- it now has just shy of 260,000 miles and going strong.
I have one vehicle and one motorycycle. the gmc Yukon is a 2002 and I plan to drive it till it dies. I have a few thousand dollars left on the loan . but I put upwards of 40thousand miles a year on it. but I also need this big vehicle to pull my trailer for when I do my school shows or full stage illusion shows. I feel that it does the job for me however I am thinking here that maybe it might be good to soon up grade to a newer one as the gas mileage on this one is now pretty sad. with so many miles on it and the wear and tear from all the years it does not get the gas mileage it used to. I ride the bike for all my run around stuff in town or when I go play disc golf or what ever. 90% of the time using my truck is for biz./ I am not a fan of leasing a vehicle. and Yes Dave Ramsey suggest buying a slightly used vehicle for cash if you can afford it. I can tell you one thing. when I had my custom show car and used that to show up at shows it was pure gold. I got huge tips and more respect. LOL I plan to purchase something cool in the near future for all my private party stuff so I can show up I style. I also plan that when I get a new biz vehicle I am going to get something fun or have it painted up fun. maybe have it match my trailer. who knows. drive safe what ever you do!
sam sandler- America's only full-time DEAF Illusionist
http://www.samsandler.com http://www.deafinitelymagic.com |
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Howie Diddot Inner circle San Francisco & Los Angeles California 3288 Posts |
Quote:
On 2012-04-22 21:08, Sam Sandler wrote: Sam; have you thought about a Magic Bus? |
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Scott Burton Inner circle 1131 Posts |
Everyone's situation is different but shouldn't the cost of business be worked into your pricing? If you work 4-5 years doing that many miles each year, shouldn't such a vehicle be easily paid for? Too expensive of a vehicle?
Vehicles are such a waste of money (depeciation and interest combined - a killer!) and I try to avoid it as much as possible. We have one vehicle in our family - for me, my wife, ("for" my kids but of course we transport them around), and my business. Rather than the high cost of buying a vehicle, I just rent a car in most cases for gigs as, for me, it makes more financial sense AND I always arrive in a brand new (and clean!) car. If our one vehicle breaks down (hasn't yet but you don't know), I'll rent one. This is one of the reasons my wife never went back to work after having my daughter - the finaical gains from employment quickly dissipate away by haivng another vehicle - parking, depreciation, loans, maintenance, gas, etc, etc. What a waste! We saw more value in having her with our kids. (Now, she created a home business that does really well so...bonus!) |
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Ken Northridge Inner circle Atlantic City, NJ 2392 Posts |
Quote:
On 2012-04-22 21:08, Sam Sandler wrote: That was one of my points. I believe it does make a difference. Scott, Thanks for jumping in here. You have a very unique way of thinking and that’s what I like. I can see the advantages of renting a vehicle for your gigs. However, I do 350+ shows a year so I don’t think that would work for me. I’ve been running a profitable business now for 15 years so I guess you could say it is paid for. Its just that I realize what a huge expenditure it is and wondered how I could reduce it. As far as the vehicle being too expensive, I’m as cheap as they come. Although, I did treat myself to power windows and cruise control this past purchase. I really like Donald’s suggestion best (buying a slightly used vehicle with cash) and I am recommitted to do so.
"Love is the real magic." -Doug Henning
www.KenNorthridge.com |
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