How to enter a new car purchase

[Chris]

Hi,
I don't know if any you of run into this but I will try
to explain:
I purchased a new car recently but I want to track the
tax, title, tag, etc... (I micro manage too much). Where
do you track these. In the asset, and expense account, or
the loan?

I also made a downpayment? Is that an expense or part of
asset?
I am pretty sure i am complicating this but any help
would be appreciated.
I would appreciate advice on how other people have
entered in the items from a new vehicle purcahse.
Thanks

[Dick Watson]

As to tracking expenses associated with a specific vehicle, here's what I
do. I've created a classification, called "Class" and in that classification
I've created a Top category Automobile. I create subcategories for each
vehicle like Automobile:Honda CR-V or Automobile:M-B SLK-230. Every expense
that relates to a specific vehicle gets not only a categorization like
Automobile:Gasoline, Taxes:Vehicle Property Tax, or Insurance:Auto, it also
gets a classification like Automobile:SLK. These classifications go against
the transaction in the account where the expense was incurred, e.g.,
Checking or Discover. Then you can report on Class and select Automobile or
Automobile:SLK to find out what the vehicle is costing you. I probably
micro-manage too much as well. Oh, and once you have classifications
working, you can add things like Vacation:Boston 2001, Cell
Phone:(303)555-1212, and Flying:Hours. A veritable micro-managers delight.
For more information, read about classification in on-line help.

As to the down payment, I do not create asset accounts for vehicles since
they basically depreciate to $0. I would categorize the down payment (and
any balance that you borrowed to pay, for that matter) as
Automobile:Payment, Class, say, Automobile:2003 Wombat. When I sell it, I
just categorize the proceeds as negative Automobile:Payment, classification,
say, Automobile:2003 Wombat. Call the interest expense portion of the loan
payments Interest Expense:Auto Loan, Class, say, Automobile:2003 Wombat.
Then you can look at Automobile:2003 Wombat and see every penny it has cost
you over the years. (See also the question in the FAQ, soon to be posted,
about refinancing houses to see some more details on linking loans to
payments.)

So, let's say you bought a $20,000 Wombat, financed $18,000, and paid $2,000
sales taxes and $200.00 title fee. Picture a transaction like:

Payee: Wombat of Waukegan
Amount: $4,200
Splits:
Automobile:Payment, Class: Automobile:2003 Wombat $20,000, Memo: VIN
12345678901234567
Taxes:Sales Tax, Class: Automobile:2003 Wombat $2,000
Taxes:Other Fees, Automobile:2003 Wombat $200
Other Income:Loan Proceeds Received ($18,000), Memo: see loan acct "2003
Wombat"

Help?

"Chris" <delan...@yahoo.com> wrote in message
news:028c01c2ca84$565833b0$d6f82ecf@TK2MSFTNGXA13...

[Chris Cowles]

Tax, title, etc., add no value to the asset. They are expenses unless you're
a business. In that case, all costs associated with the initial purchase
(including painting your name on the side) are lumped together with the
asset. Those are then depreciated in aggregate using the appropriate
depreciation schedule for the vehicle. That depreciation is expense.

Future maintenance activities on the vehicle are expensed at the time spent,
unless they add to the life of the vehicle. An example is rebuilding the
engine and getting a paint job. In that case, that expenses is added back to
the current (depreciated) basis of the asset and depreciated over the
remaining useful life, as extended by the maintenance.
--
Chris Cowles
Gainesville, FL

"Chris" <delan...@yahoo.com> wrote in message
news:028c01c2ca84$565833b0$d6f82ecf@TK2MSFTNGXA13...

[Bob Becnel]

At the time of purchase, a manuf's extended warranty would probably be
considered as an asset.

Right?

***************************
Bob Becnel
rg...@cec.wustl.edu
http://cec.wustl.edu/~rgb2/
***************************

[Dick Watson]

How can you realize any value for this asset?

"Bob Becnel" <rg...@cec.wustl.edu> wrote in message
news:Pine.SOL.3.96.103020...@hilton.cec.wustl.edu...

[Brent]

In certain states, all or a portion of the registration fees are tax
deductible, so they need to be correctly categorized for export to your
tax software, if this applies to you.

"Chris" <delan...@yahoo.com> wrote in message
news:028c01c2ca84$565833b0$d6f82ecf@TK2MSFTNGXA13...

[Bob Becnel]

If you sold the car and the ext warrant was still valid, then that would
appreciate the asset. I'm not sure, that is why I put the question out
there.

Bob

***************************
Bob Becnel
rg...@cec.wustl.edu
http://cec.wustl.edu/~rgb2/
***************************

[Dick Watson]

I guess that may be true if it's transferable and if you think you can
really get someone to pay a premium for this transferability. I'm skeptical,
so I think I'd not exaggerate my net worth by this amount. YMMV.

I guess I still get back to the same point: is your automobile (with or
without extended warranty) an element you want to consider in your net worth
as reported by Money? If so, create the asset account. And transfer the cost
of the extended warranty to the asset account.

"Bob Becnel" <rg...@cec.wustl.edu> wrote in message
news:Pine.SOL.3.96.103020...@hilton.cec.wustl.edu...

[Chris Cowles]

In my opinion, not unless it increased the value. I doubt a bank would
consider it an asset for the purposes of securing a loan.

Note the keyword opinion. Yours and others may well be different. We're not
discussing GAAP here, so there's nothing codified you have to follow.

--
Chris Cowles
Gainesville, FL

"Bob Becnel" <rg...@cec.wustl.edu> wrote in message
news:Pine.SOL.3.96.103020...@hilton.cec.wustl.edu...
>

[Cal Learner-- MVP]

In microsoft.public.money, Chris Cowles wrote:

>In my opinion, not unless it increased the value. I doubt a bank would
>consider it an asset for the purposes of securing a loan.
>
>Note the keyword opinion. Yours and others may well be different. We're not
>discussing GAAP here, so there's nothing codified you have to follow.
>

>"Bob Becnel" <rg...@cec.wustl.edu> wrote in message
>news:Pine.SOL.3.96.103020...@hilton.cec.wustl.edu...
>>
>> At the time of purchase, a manuf's extended warranty would probably be
>> considered as an asset.
>>
>> Right?
>>

It is an interesting theory tho. You could argue that it is an
asset. But it is an asset you will have to spend money to use. If
you use the warrantee, there are bound to be associated uninsured
expenses. So if you were going to consider it an asset, you would
need to think up an even larger liability to balance and overcome
it. That would probably approach reality better. Not that I would
actually consider doing it tho.

I think of a car as an expense. That's the easy way. But there are
lots of ways of looking at this stuff. I go overboard in different
areas. ;-)