Money spent

[mechman600]

He meant ROI of the mods, not the car itself. $XXX.XX on mods = $XXX.XX fuel savings vs not doing them at all. Nothing to do with depreciation of the car.
I agree, it would be a good feature in this forum to be able to see it.

[Thymeclock]

Originally Posted by mechman600

He meant ROI of the mods, not the car itself. $XXX.XX on mods = $XXX.XX fuel savings vs not doing them at all. Nothing to do with depreciation of the car.
I agree, it would be a good feature in this forum to be able to see it.

Even so, will he ever come out ahead, financially? If the car were to be resold would anyone want to pay extra for someone else's mods?

Or is it, as the title is so aptly phrased, merely "money spent"?

[mechman600]

Don't forget that Ecomodding is a hobby, and it's hard to put a ROI figure on a hobby. If someone likes to go to movies or fishing or playing hockey, you don't question the ROI on these things, calling them a waste of money. I think the same can be said about Ecomodding.

I'm gonna build an electric car, but on my 13 km round trip commute, I will probably never get my money back. But it sure will be fun trying!

[NachtRitter]

Originally Posted by Thymeclock

...
Strictly speaking, one enters into any investment expecting to make a financial profit (AKA a 'return'). Otherwise it is not an investment. If the term is used so very broadly as to call vehicle ownership a financial investment, it is a very poor financial investment indeed, since the financial return will be a negative one or a loss. Unless you are a used car turnaround specialist it is difficult or impossible for the average vehicle owner to profit financially from ownership of a motor vehicle.

That seems to disagree with portions of the "What is Investment" link you provided. Or maybe you are intentionally slotting vehicle ownership into a "financial" investment cubby? The page you linked has other investment categories besides purely financial ones:

Investment in terms of Economics
According to economic theories, investment is defined as the per-unit production of goods, which have not been consumed, but will however, be used for the purpose of future production. Examples of this type of investments are tangible goods like construction of a factory or bridge and intangible goods like 6 months of on-the-job training.
....

Investment in Terms of Business Management:
According to business management theories, investment refers to tangible assets like machinery and equipments and buildings and intangible assets like copyrights or patents and goodwill.

Money is not spent on a factory or a bridge with the expectation that the factory or bridge itself will be worth more in x number of years. A business does not spend money on "Machinery, equipments and buildings" in order to turn a profit off that machinery, equipments and buildings. In fact, those assets are guaranteed to lose value (tax code gives the business a tax break because of it) so they are (strictly speaking) a very poor 'financial' investment. But the assets don't have to provide a return themselves in order to have a positive ROI. There is benefit to the community (which can be measured in $$) for having a bridge. The business must weigh the benefit the purchased assets provide (generally in higher production which hopefully translates to greater sales or lower per unit costs), not how much they can get for the asset if they sold it. In this sense, I think the ROI analogy for vehicles is valid.

If you only focus on the portion of the Investment definition that has to do with financial instruments, where the asset you purchase does not do anything for you (that is, does not reduce your manufacturing effort, save you time, reduce your fuel consumption, etc) except increase or decrease value (and maybe pay out some $$ occasionally), then you are absolutely right... vehicles and FE modifications are a very poor 'financial' investment. But I believe the full definition of Investment is already broader than that, per your own link.

Hobby or not, it seems the ROI term is applicable... any time you are looking to spend money or time (which equates to money) on something, you are typically looking to get some 'return' on it. If you translate that return into a monetary equivalent, you can calculate an ROI. Of course, what you think the return is worth probably is not what I think the return is worth, but that doesn't matter in the case of hobbies... If you think it's worth it to you, then it is ... This is stated similarly at Return On Investment (ROI) Definition | Investopedia:

Keep in mind that the calculation for return on investment and, therefore the definition, can be modified to suit the situation -it all depends on what you include as returns and costs. The definition of the term in the broadest sense just attempts to measure the profitability of an investment and, as such, there is no one "right" calculation.

[Thymeclock]

Originally Posted by mechman600

Don't forget that Ecomodding is a hobby, and it's hard to put a ROI figure on a hobby. If someone likes to go to movies or fishing or playing hockey, you don't question the ROI on these things, calling them a waste of money. I think the same can be said about Ecomodding.

I didn't say such spending is a "waste of money". I am saying that that the money, once spent, will never be regained. I agree with your statement that it is hard to put a ROI figure on a hobby, primarily because it is not applicable.

As for definitions, as with many things in our modern times the definition has been changed to include things it formerly hadn't. If you were to go to a financial planner and ask whether real estate, securities, precious metals or a car are investments he would tell you that your car is not an investment, although the others are. Why? Because your car has no possible potential for capital appreciation.

[NachtRitter]

Originally Posted by Thymeclock

As for definitions, as with many things in our modern times the definition has been changed to include things it formerly hadn't. If you were to go to a financial planner and ask whether real estate, securities, precious metals or a car are investments he would tell you that your car is not an investment, although the others are. Why? Because your car has no possible potential for capital appreciation.

No question that the definition has evolved over time... Used to be that "investing" as defined today was termed "speculating". Now Investing is a "good" thing while Speculating is a "bad" thing (perception-wise). Fortunately, we're pretty adaptable and the term ROI is well enough understood in this context that most of us can figure it out. Not looking for a financial planner's stamp of approval here

[graydonengineering]

Auto maintenance can be a very poor investment. This year I have spent about $500 on auto parts for maintenance issues resulting in about 5% better gas mileage. I expect to recover about $70 a year from my lower fuel costs..

On the plus side, this old clunker is more enjoyable to drive with better power now. It beats the alternative of trading it in for a $400/month payment on a new truck that is bigger and less fuel efficient since every year cars seem to grow and grow ("Now, BIGGER than ever!").

Mods on the other hand can be very cheap and may even net a ROI. In my case, i tend to spend extra money on mods for aesthetic reasons which drastically extend the time it would take to net a return. I think of it as spending money today so I can spend less on gas every week from now on and also prepare for the REAL high gas prices of the future.

[moorecomp]

This whole argument reminds me of when my wife comes home and says "I saved $50 on clothes today." It means she only spent $150 instead of $200.

[brucepick]

First off, great concept! Second, I think it's difficult to build the calculations to actually do this properly.

With your car's mpg going up and down regularly simply due to seasonal climate changes, and gas prices also going up and sometimes down regularly, a determination of what you WOULD have spent on a given fillup without these and those mods would be somewhat chancy.

If you had a whole year's worth of data for the unmodded car you could compare your current modded mpg vs. your unmodded mpg for a given month. But, having been at this for a few years, I know that even the weather conditions for entire months will vary from year to year.

Changing needs of what distances or routes to use and even what time of day to drive can also significantly affect your mpg. My point is, it's just about impossible to get a real apples-to-apples comparison.

OTOH, I very happily did the best I could on such a calculation, and figured that over the first three years owning the Civic, I saved enough on gas to cover the cost of the car itself, when compared to the car I used to drive. However, I did ignore the cost of the mods... Just too much data in the mods cost component, which I had not saved anywhere convenient. It was nice to see the estimated result though.