Real Car Costs •
Some Cars Cost Less to OwnWhy 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.
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
What is its reputation for reliability? Look it up in consumer magazines like
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:
SUV gets 15 mpg. 667 gal @ $2/gal = $1,334
Still under warranty for 1 more year; cost = $0
Replace muffler, water pump and/or timing belt likely; cost = $600
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.
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