True North Federal Credit Union
What's the Real Cost of Your First Car?

 Seventeen-year-old Lanna bought a car for $1,800. Lanna was thrilled and felt that she got a great deal on the monthly payment. But six months later, her "really cool car" sits in the driveway most of the time because she can't afford to drive it.

 

Common auto expenses shouldn’t discourage you; they simply come with the territory of auto ownership.  Figure out the REAL cost of car ownership, starting with this list.

 

1. When you buy your car, in addition to the cost of the car itself, there will be tax, title, and license plate fees.

2. Gas. Lanna needs about $25 every week for the gasoline to drive her car to work and school. You can't control gasoline prices, but compact cars are more fuel-efficient than trucks and vans.

3. Oil. Changing your oil every three months takes only about 30-45 minutes and $20-$40 (a lot less to do it yourself), but the consequences of neglecting it can be serious.

4. Maintenance. It cost Lanna $225 to replace her muffler. If you're buying a used car with higher mileage, think about frequently used and exposed parts: exhaust system, windshield wipers, brakes, tires, lights, and so on. Repairs can be costly, so be prepared by saving for them.

5. Insurance. Most states and most lenders require auto insurance. Lanna pays the excess that adding her to her parents policy cost, which was $120 a month. It can run as high as over $1,000 for 6 months once you obtain your own policy. Many insurers charge teenagers double or triple premiums because new drivers are a higher risk. Ask about discounts for such things as earning good grades in school, taking a driver's ed course, or completing an auto insurance company's driver's ed log to show you have experienced driving in a variety of conditions.

 

 

Related Links:

 

True North Buy A Car page

 

How Much Will The Teen Driver Cost?


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