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
||$60 - $200
|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
|$420 - $890
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.
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:
|Insurance for 1 year
|Oil changes for 1 year
||4 @ $20 each = $80
||4 @ $20 each = $80
|Gas to drive
||Car gets 28 mpg.
@ $3.65/gal = $1,303
SUV gets 15 mpg.
667 gal @
$3.65/gal = $2,435
Still under warranty for 1 more year; cost = $0
Replace muffler, water pump and/or timing belt likely; cost = $600
cost, 1 year
||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
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