So, You Want to Drive for Uber? Here's what to buy
If you're looking at driving for one of the car services like Uber or Lyft, there are certain requirements you have to meet, among them having a newer car, at minimum a 2000 model or later. In some cities, like New York, it must be as recent as 2011. To help address this, Enterprise Car Rental recently announced a program enabling drivers to rent a car for Uber use for $210 per week. Another option is Flexdrive, a new short-term leasing car option that could be effective for Uber and Lyft drivers. Either of those is an excellent way to try out working for a ride service with minimal investment, but once you get serious about Uber, you might find nothing beats starting out with your own new car. Here are some tips on what to look for:
New vs. Used, Bought vs. Leased
There's no shortage of late-model used cars sitting on dealers' lots as Certified Pre-Owned units, and lower mileage models are certainly great candidates for Uber or Lyft service. But there are benefits to a new car besides virtually no miles on the clock, such as a longer warranty. And a new vehicle will make it easier to pass the Uber vehicle-inspection requirement. There's nothing like that new car smell and look that may translate into rider satisfaction and high ratings.
But the trick to making a new car work is not to overspend in the first place. So while there are plenty of 2016 models to choose from, the smart money is on finding a new 2015 model at a dealership. Many of these vehicles have hefty incentives on them-usually more than those available on current models-and the fact that they've been on the dealer lot for some time should give you additional leverage in negotiations.
While seeking a 2015 model, you should also resist the temptation to take advantage of the attractive lease deals available these days. While the monthly payments will be lower with a lease, successful drivers may soon find themselves exceeding the deal's mileage cap. You're better off owning the car outright for a higher monthly payment rather than face a big bill for excess mileage when it comes time to turn the car in.
5-Year Cost to Own
Another factor to consider is cost of ownership, which not only includes the purchase price and depreciation, but also fuel costs, insurance and maintenance. Kelley Blue Book compiles 5-Year Cost to Own data that takes into account all these factors to come up with an average total cost of ownership over a 5-year period. While not Uber-specific, this can be an important factor in your new-car buying decision, because while you may be able to negotiate a good deal on the purchase price, another model with a smaller discount may actually be cheaper to own and operate.
Top 10 UberX Candidates
If you are looking at driving for the basic UberX service, your best bet is a compact 4-door sedan. Topping the list is the 2015 Honda Civic, which has a 5-Year CTO of $30,863, which works out to $6,172 or about $118 per week. Currently 2015 models are being offered with subsidized finance rates as dealers clear out stocks in anticipation of the all-new 2016 model.
The 2015 Toyota Corolla is just behind at $31,174. It, too, is being offered with a $1,000 rebate. Doing the math, annual costs will average $6,234 or nearly $120 per week. Corolla is unchanged for 2016.
The 2015 Hyundai Elantra will be replaced by an all-new model for 2016, so it too is eligible for some hefty discounts which can run as high at $3,250 through Jan. 5. Its 5-Year Cost to Own is $33,825.
There's no major model change in store for the 2015 Dodge Dart, but in addition of annual costs of $6,800 on a 5-Year CTO of $34,004, Dodge is offering hefty rebates of $3,000 on the SXT trim level.
Perhaps not as generous as its Hyundai sibling, Kia is offering $1,000 rebate under a special Uber driver program for its 2015 Kia Forte. Its 5-Year Cost to Own is $34,011, marginally more than the more heavily incentivized Dart.
The 2015 Chevrolet Cruze is another prime candidate for UberX service with a 5-Year CTO of $34,238, which works out to about $131 per week. A new 2016 model is on the way, so Chevy is looking to clear out the old model with a $1,000 rebate.
Another way to minimize your expenses is to drive a high-fuel-economy vehicle. That is why the 2015 Toyota Prius, with its 51 mpg city EPA rating makes an ideal Uber ride. Not coincidentally, it is the mainstay of many taxi fleets. The all-new 2016 model is just hitting showrooms, so Toyota has a $1,000 rebate on financed purchases. The 5-Year CTO on the Prius is $35,030, just over $7,000 per year.
If you're looking for a slightly larger midsize car, the 2015 Nissan Altima fits the bill and has a 5-Year CTO of $36,481, which works out to $140 per week. In anticipation of the refreshed 2016 model, Nissan is clearing out the current car with $2,500 cash plus other savings on option packages.
Also carrying a $2,500 rebate is the 2015 Kia Optima, which is being replaced by a facelifted 2016 model. The Optima is slightly more expensive, with a 5-Year CTO of $38,170. While the $1,000 Uber driver incentive is available on the Optima, it can't be combined with the larger cash-back offer.
Rounding out the Top 10 candidates is the 2016 Toyota Camry, which has a 5-Year CTO of $38,426. While there are no incentives on the 2015 Camry, Toyota is advertising a $500 rebate on 2016 models.
Other midsize cars to consider that are within $1,000 in 5-Year CTO are the Chevrolet Malibu, Honda Accord and Hyundai Sonata. While the 2015 Chrysler 200 and Ford Fusion are above $41,000 in 5-Year CTO (which still works out to about $160 per week), they are being offered with hefty $3,000 rebates.
Editor's Note: Flexdrive is owned by Cox Automotive, parent company of Kelley Blue Book.