Representative example: Sergei buys a car to drive for Uber
Sergei lives in Ontario and recently got a side job working as an Uber driver in a fairly affluent region. He wants to get a car for both work and personal use. Knowing his clientele will prefer a luxury vehicle, Sergei decides to buy a 2020 BMW 330I XDRIVE Sedan for $53,000.00 from a dealership. After putting a 15% down payment of $7,950.00 on the car, he heads to his local bank where he applies for an auto loan to cover the remaining cost.
Because Sergei has a solid credit history, he is approved for an Uber car loan to cover the outstanding amount plus 13% HST on the purchase price. Along with the cost of his loan, he also pays approximately $180.00 to register his vehicle with the province of Ontario – this includes the cost of license plates, a sticker and a vehicle permit.
Cost of new car | $45,050.00 ($53,000.00 less $7,950.00 down payment) |
Loan type | Auto loan (term loan) |
Loan amount | $51,940.00 |
Interest rate (APR) | 5.90% |
Loan term | 7 years |
Additional fees | Origination fee of 3.00% ($1,527.20) |
Payment | $756.28 monthly or $348.68 biweekly |
Total loan cost | $63,527.52 with monthly payments or $63,459.76 with biweekly payments |
Had Sergei chosen to rent a car through one of Uber’s drivesharing partner companies instead, he could’ve ended up paying around $5-$10 per hour (plus tax) to rent the same type of vehicle. Assuming a rental cost of $6.50/hour and a 15-hour work week, this would’ve cost just over $5,000/year plus tax.
Bear in mind, though, that this would’ve only been the cost of renting a vehicle for Sergei to drive for Uber. He still would have had to find (and pay for) another means of transportation to use when not driving for Uber.
*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.