Check my math, Oppo

"Smallbear wants a modern Syclone, local Maple Leafs spammer" (smallbear94) 02/16/2017 at 08:38 • Filed to: i thought I was done with this in high school, word problems, check my math

0

11

So last fall when I renewed my insurance I made some changes. I added extra coverage, added business use and added extra mileage. My premium was set to come down a bit, but obviously with the additions it went up. It came down $300, added about $600 for business use, and another $400 for the extra coverage... overall I’m $700 more than I paid last year but $1000 over what I’d have paid if I’d left it alone. Let’s just use that $1000 number because it makes things easier.

Here’s the question. Assuming that $1000 more for insurance, and assuming an average of 17L/100km (should be higher, but allowing margin) fuel economy, and assuming an average fuel cost of $1.30/L (currently $1.14 but I expect it to go north again—peaked last summer for me at ~1.25, so still a little room), and given that Canada’s rules regarding business mileage on a personal vehicle are $0.54 for the first 5000km and $0.48 after that... how many business use km’s do I need before I break even?

I worked out an answer but I want to know what Oppo’s numbers people say. Rough figures I’m in the 3100-3200km range by my math, see what you make of it.

Patrick Nichols > Smallbear wants a modern Syclone, local Maple Leafs spammer 02/16/2017 at 08:45

1

Is that what you can reimburse yourself without a tax penalty or what you can deduct from income to lower your tax basis? First one I can do, but the second would require knowing your marginal tax rate.

Smallbear wants a modern Syclone, local Maple Leafs spammer > Patrick Nichols 02/16/2017 at 08:48

0

Basically, you use the vehicle for business, tell your employer how many km’s you did, and they pay you back at those rates. The mileage rates are straight reimbursement, no tax on those. And all tax is already included in the fuel cost. Basically these are all finished numbers, all taxes already included.

Patrick Nichols > Patrick Nichols 02/16/2017 at 08:51

1

(.54*5000)+(.48*k)=1000+(100/17)*(1.3)(5000+k)

Solve for k

Patrick Nichols > Patrick Nichols 02/16/2017 at 08:54

1

I think I screwed something up...

Patrick Nichols > Patrick Nichols 02/16/2017 at 09:02

1

(.54*5000)+(.48*k)=1000+(17/100)*(1.3)(5000+k)

2700+.48k=1000+1105+.221k

595=-.295k

-2016.95 km + 5000 km = whoops

...

.54*k=1000+.221k

3135 km?

Patrick Nichols > Smallbear wants a modern Syclone, local Maple Leafs spammer 02/16/2017 at 09:04

1

3135 km? Seems low but then again that mileage reimbursement is crazy high, most businesses in the US (if they even reimburse) are somewhere around $0.55 a mile.

Smallbear wants a modern Syclone, local Maple Leafs spammer > Patrick Nichols 02/16/2017 at 09:06

0

I’m not going to judge that because I don’t know how you were going about the question (EDIT your original (100/17) threw me off. Makes sense now). This must be why teachers say to explain your work, I guess.

I just divided the original 1000 by .54 to get the mileage for that, multiplied by the fuel cost to get the total fuel cost for those kms, divided that by .54, multiplied the ADDITIONAL kms by fuel cost, divide by .54, lather rinse repeat until I got down to really small numbers.

I think I’m right but ~3100km seems kinda low.

Smallbear wants a modern Syclone, local Maple Leafs spammer > Patrick Nichols 02/16/2017 at 09:08

0

I came in 3133 so I guess that’s right.

That’s good news, anyway. after 3135-ish IT’S ALL GRAVY YISSSSS

Smallbear wants a modern Syclone, local Maple Leafs spammer > Patrick Nichols 02/16/2017 at 09:12

1

Thanks. I like it better when I can see things in a formula, unfortunately I suck at making them myself :)

Patrick Nichols > Smallbear wants a modern Syclone, local Maple Leafs spammer 02/16/2017 at 09:26

1

something something more than one way...

Smallbear wants a modern Syclone, local Maple Leafs spammer > Patrick Nichols 02/16/2017 at 13:31

0

I’m stealing that.