Money spent
 

I know we are trying to spend less and less on our gas used to climb that MPG hill to stick it to the man with the smile. Is there anyway to add Money Spent into the persons car log. This section would be like gas log but with money spent. This way each person can track what he/she has spent and when. ( i.e. vehicle cost and cost of mods) Then in the Efficiency log the total can go there and can be added into the formula. At that point the member can find out where the break even point is for that car.

I think if a person can visually start seeing any type of ROI then it will motivate them to keep going. Even if they feel their MPG's are not moving fast enough as long as you see the ROI then you can see that you are going in the right direction.

Just an idea.

...the $-spent to achieve $-saved in MPG, ie:

ROI = $-saved / $-spent

Who is "the man with the smile"? And who is it that you want to "stick it to"?

A motor vehicle is not an investment. So what does Return On Investment have to do with owning and operating one?

So your saying that someone that buys/trades a car from what they where driving is not an investment?

You could do this manually with the garage entry. For instance below is mine for the Paseo. You could simply put a price after each mod and a total at the end so you know what you've spent. Then, on the fuel log page, you can see what you've saved vs EPA. Now its not a direct compairison since driving techniques are free, but its a good start.

http://ecomodder.com/forum/attachmen...1&d=1330953983



http://ecomodder.com/forum/attachmen...1&d=1330954132

Motor vehicles are not an investment. They depreciate rapidly and there is no capital appreciation. In other words, there is no way of making a profit as you will never recoup what you paid for the vehicle, nor receive any return on what you 'invested'.

For a better understanding of what an investment is click here.

While thats true of probably 99%+ of vehicles purchased you can buy a fixer upper and resell it for more than you've paid and drive it in the mean time. A coworker of mine does it routinely and I've done it as well.

So have I. However, you need to factor in all the money you put into it to repair it, plus the value of your labor (sweat equity), besides which it continues to depreciate (lose value) as you own it. Usually the only time you can break even or show the slightest profit is when it's a beater, it's totally depreciated, and you paid almost nothing for it.

If we want to figure out the money, effort (in $$), depreciation, etc. that it costs to get the car ready vs what we get out of the car is greater than 1 (indicating positive return) or less than 1 (indicating negative return), what would you call it? Not "ROI"? Is there a different well understood term that conveys the same meaning?

I understand that a person shouldn't expect the value of a vehicle to go up, but it is still a tangible asset and is still providing some kind of return. Just like any investment, the ROI can be positive or negative. For a vehicle, it may not be in simple $$ terms, but in most cases it can be distilled down so it can be calculated in $$ terms. For instance if you have to go somewhere regularly (e.g. commuting), you can calculate the value of your time which you save vs walking or cycling (calculation depends the value you place on your time, of course). Obviously even a cheap car can do the job, but if it's not reliable then you have to add the cost of fixing in there as well... which might highlight that a newer or more expensive, more reliable car is a better way to spend your money.

I'm not going to say that the ROI (or whatever you want to call it) on a vehicle is going to come out positive, only that the same concept can be used to figure out how much (or little) it is costing vs alternatives.

The same goes for FE modifications... Some $$, effort, reduction in resale value (maybe) is being put in with the expectation of some reduction in fuel consumption... the first part is the investment which includes tangible assets (which will depreciate very quickly in this case) while the second is the return in the form of improved efficiency.

Here the term (ROI) is being used very broadly by the OP, outside the use of the term in the conventional way.

You (and the OP) are using the term broadly as to include any activity or perceived asset. One could say "I am invested in my _____". In marriage, your investment would be your spouse. Or your "investment" might be in the future of your children. If you are patriotic, you might consider your investment to be taking an interest in your country. Et cetera. However these are not financial investments. The term ROI specifically refers to financial investments, not to all these other perceived values or interests.

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.

Actually what you are referring to is the cost of ownership and whatever perceived benefit might be derived from it. But that's apart from the conventional usage of the phrase 'ROI'...

In effect the title of the thread acknowledges this, for "money spent" is not money invested.

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"?

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!

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:
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:

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.

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 :p

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.

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.

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.