Maryland Attorney General - Teen Consumer

Dude, what about cars?

Real Car Costs • Some Cars Cost Less to Own
Why Is Car Insurance for Teens So Expensive?

Real Car Costs
Can't wait to get a car? It's tempting to look at car ads and think, "Monthly payment $199 ... I could handle that!" But you might not realize that the loan payment is only part of the cost of owning a car. You also have to pay for insurance, registration, gas, maintenance and repairs.

Typical Monthly Expense
Loan payment: depends on price of car and down payment	$200 - $400
Insurance: depends on your age, gender, type of car, coverage wanted and where you live	$120 - $200
Gas: depends on price of gas, miles driven, and car's mpg	$30 - $100
Maintenance/Repairs: includes regular maintenance like oil changes, tire rotation. Older cars may need major repairs. New cars have major repairs under warranty, but they can get a nail in a tire or lose a hubcap.	$20 - $70
Other: car washes, parking tickets, etc.	$20
Total	$390 - $790
As you can see, the actual cost of owning a car may be twice as much as the loan payment!

Some Cars Cost Less to Own
Just as different cars have different price tags, they cost different amounts to keep after you buy them. The cost of insurance, gas, and repairs can be very different. Here are some things you can find out ahead of time about any car you are considering buying:

How much will it cost to insure? Call an insurance agent to ask.
What gas mileage does it get? Look up the "mpg" at www.fueleconomy.gov
What is its reputation for reliability? Look it up in consumer magazines like Consumer Reports.
If a used car, what repairs is it likely to need soon? Ask a mechanic.

This info can help you compare choices. Let's say you can spend $10,000 on your first car. Two choices interest you: a 3-year-old compact car and a 6-year-old SUV. After doing your research, you could compare what you found out like this:

	3-year-old compact car	6-year-old SUV
Insurance for 1 year	$2,300	$2,000
Oil changes for 1 year	4 @ $20 each = $80	4 @ $20 each = $80
Gas to drive 10,000 miles	Car gets 28 mpg. 357 gallons @ $2/gal = $714	SUV gets 15 mpg. 667 gal @ $2/gal = $1,334
Repairs likely needed soon?	Still under warranty for 1 more year; cost = $0	Replace muffler, water pump and/or timing belt likely; cost = $600
Total operating cost, 1 year	$3,094	$4,014
Comparison points	This car gets good gas mileage. The car is still pretty "young" so won't need a lot of repairs in the next few years, and it's still under warranty for 1 more year. Also, this model is rated high by consumer magazines.	This vehicle costs a little less to insure. But, it doesn't get as good gas mileage. Also, at six years old it will probably need some major repairs soon, which won't be covered under warranty. This model is rated poor by consumer magazines.

Why Is Car Insurance for Teens So Expensive?
Car insurance for teen drivers is very expensive, and it's more expensive for male teens than for female teens. That may not seem fair, but it is based on statistics. Teen drivers are four times as likely to get in an accident as older drivers are, and male teen drivers are involved in more accidents than female teen drivers.

Ways to make your auto insurance less expensive:

Make good grades. Many insurance companies offer a discount for teen drivers who maintain a "B" average.
Drive a car that costs less to insure. Insurance companies charge more to insure sporty cars (the kind that risk-taking drivers like to drive fast in), cars that have a high theft rate, and cars that don't hold up well in crashes. You can ask your insurance company which cars cost less to insure.
Be a safe driver. Having even a "little" accident or getting a traffic ticket for speeding, tailgating, driving under the influence or not wearing a seatbelt can raise your insurance or even get your insurance cancelled.