Teen guide: What it really costs to be in the driver’s seat

There’s no denying the freedom that comes with driving—but don’t let the excitement block your view of the expenses. Even if someone else supplies the car (thanks, Mom! thanks, Dad!), driving dollars can add up faster than you might think. This quick tip sheet breaks down the costs for new drivers and how to manage them.

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Getting on the road

DRIVER'S ED
Your first step is to learn how to drive. Many states require new drivers to have a certain number of hours in state-approved driver’s ed, and those classes may come with a fee. Find out about your state’s regulations (Link:https://www.usa.gov/motor-vehicle-services).

Who offers classes:

  • Driving schools, $50–$80 per hour
  • Community organizations, usually for a fee
  • Some high schools, where it may be free

LICENSE
The total amount you’ll owe to your state’s Department of Motor Vehicles covers a learner’s permit, if you need one, and any required driving tests.

$10–$100
DEPENDS ON WHERE YOU LIVE

Sources: Thumbtack.com; Fiscalpolicy.org

Going places

GAS

$2.55
A gallon

$30–$40
To fill the tank

$1,500
What you could pay annually

TIP: Gas prices go up and down, so make sure you adjust your budget when they change. Free apps can locate the lowest prices near you. 

Source: AAA (as of 10/2017)

TOLLS
If you drive toll roads regularly, add up what it’s likely to cost you each week, say, $10. You may be able to bypass them by taking an alternative route. For road trips, preplan with an app to avoid costly tolls.

TIP: If you pay tolls electronically, make sure you always have enough in your bank account to cover the charges. If not, you might get hit with overdraft fees.

Affording care and upkeep

PARKING
Depending where you live, you might never pay to park your car, or you could end up spending a lot—especially if you often drive to a city center. Parking apps might help you find a better deal. If you’re often feeding old-school parking meters, keep quarters handy.

Maintenance
Mark your calendar for regular tune-ups, which can include changing the oil and air filters and rotating the tires. For bigger repairs down the road, you might set at least $50 aside each month from your paychecks or allowance. 

$1,168
Average annual cost to keep a new car in good shape

CLEANING
Drive-through car washes start around $5 and go up to $15 or even more, plus tips. You can easily clean your car for less with a bucket and a sponge. The savings from doing it yourself adds up fast: You might spend $10 to buy a high-quality wax that lasts for a couple of washes, while a pro might charge $100 each time. 

Source: AAA, 2017

Sharing costs with your parents
Your parents will likely need to own, register and insure the car while you’re still a minor, but they may ask you to help cover some of the costs. Talk to them about what you’ll be responsible for and which driving expenses they’ll handle.

The average monthly loan payment for a new car is $510, and car insurance averages $907 a year.

Once a year you’ll need to renew the vehicle registration—it could be $8 or $200+, depending on your state and vehicle. In some states, you’ll also need an inspection, which generally costs under $40. 

TIP: If you get good grades, you might qualify for an insurance discount. Talk to your parents and the insurance company to get the details.

Sources: Edmunds.com; ValuePenguin; NCSL, 2017

Ready, set, go!
While it may seem like a lot to think about, don’t let what it costs to drive overwhelm you. Auto expenses can be easily managed if you budget for them. Refer to this list regularly, and your only look back will be through the rearview mirror. 

 

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The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment options.

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