Getting that first car is a rite of passage for many new drivers. But while you’re dreaming about the freedom and excitement of your first set of wheels, you also need to think realistically about what it’s actually going to cost you.
Expenses include:
- Sticker price
The amount you pay to purchase your car. The best cars for teens average around $11,000.
- Other purchasing fees
This includes your taxes, tags and title, and averages around $1,000, depending on your car’s sticker price.
- Finance charges
If your family takes out a loan to pay for the car, you’ll have to make monthly payments plus interest to pay it back.
- Insurance
Young and inexperienced drivers can be expensive to insure. Annual insurance cost averages range from $1,000-$3,000.
- Maintenance and repairs
The more you drive, the more upkeep your car will need, including oil changes and new tires, as well as miscellaneous costs like parking and car washes.
- Gasoline
Annual fuel costs can average close to $1,000 or more, depending on your car’s fuel efficiency and how much you drive.
- Depreciation
It’s the largest cost of owning a car. In five years, your car will be worth about 65% less than when you bought it.
Car ownership isn’t cheap – for you or your parents. Have an open discussion with your family about what you can afford, what you’ll be expected to pay for, what your parents will help you with and whether or not it’s the right time to take the plunge into car ownership.
Sources:
Driving-tests.org
Ameriprise Auto and Home Insurance