A Quintessential Rite of Passage…The Cost of Driving (Part II)

Gunst Family

Last month our youngest son turned 16 and experienced that long awaited moment…he obtained his driver’s license! A euphoric experience for him, but frankly a somber reality for us as parents.  Last week I wrote about the steps required to obtain a driver’s license and the responsibilities that accompany the privilege to drive a vehicle.  As a CFP®, I would be remiss to not address the costs associated with obtaining your privilege to drive and the estimated costs to drive your vehicle.

Driver Education

As we previously discussed, most people under age 18 learn to drive in high school or at a commercial driver training school licensed by the Secretary of State’s office.  Approved driver education classes include at least 30 hours of classroom study and six hours of behind-the-wheel training in a regular passenger vehicle.

Current estimated costs, including classroom and behind-the-wheel training are as follows:

Licensed Training School
Estimated Current Cost
High School Licensed Course (York High School) $245
Commercial Driver Training School(Top Driver) $445

 

Driver’s Instruction Permit and Driver’s License

If your teen is age 15-17, he/she may receive their instruction permit if they are enrolled in an approved driver education class or will start attending an approved driver education class within the next 30 days.

Once all of the driver education requirements are met and your child has had his or her sweet 16th birthday, they are able to obtain their driver’s license.

Costs for the Instruction Permit and License are as follows:

Official Document
Current Cost
Instruction Permit $20
Driver’s License $30

 

Driving Costs

 AAA released the results of its annual ‘Your Driving Costs’ study, revealing a 1.96 percent increase in the cost to own and operate a sedan in the U.S. The average cost rose 1.17 cents to 60.8 cents per mile, or $9,122 per year, based upon 15,000 miles of annual driving.

Please see the findings of the 2013 ‘Your Driving Costs’ study below:

Based on Driving 15,000 miles annually
Small Sedan
Medium Sedan
Large Sedan
Sedan Average
SUV 4WD
Minivan
Cost Per Mile (cents)

46.4

61.0

75.0

60.8

77.3

65.3

Cost Per Year

$6,967

$9,151

$11,248

$9,122

$11,599

$9,795

What does this mean to you and your family? To provide an example below is the MINIMUM driving costs for our 16 year old son for an average week and these numbers represent purely the cost to travel to and from school and to two activities…:

Destination
# times per week
# miles
Cost per mile (cents)
Total cost
To high school

5

5

77.3

$19.33

High school to home

5

5

77.3

$19.33

To golf dome

4

8

77.3

$24.74

Golf dome to home

4

8

77.3

$24.74

To fitness facility

3

4.5

77.3

$10.44

Fitness facility to home

3

4.5

77.3

$10.44

Total costs

 

 

 

$109.02

Insurance Costs

If you haven’t been apprehensive to this point, the insurance costs may just put you over the edge.

Illinois law requires your teen to have auto insurance before getting behind the wheel.  The easiest, and probably cheapest, way for your teen to obtain insurance is to add your teen onto your insurance policy.  The additional costs can be substantial. Annual premium costs can increase by more than $2,000.

Certain factors may affect the premium. Rating factors are characteristics that place your teen in a group of drivers with similar risk-related characteristics.  Insurance companies set a rate for each group based on the claims paid for the people in that group.  Here are some tips for your teen that may lower the insurance premiums:

  • Keep your grades up.  Most companies offer a discount to young drivers who maintain a “B” average or better. The discount can be substantial (and a much needed motivation to some teens); up to 20-25%!!! 
  • Keep a clean driving record.  Drivers with accidents and tickets usually pay higher premiums than those with good driving records.  For example, if you have more than one at-fault accident in less than three years, or if you are convicted of a moving violation, your insurance company could raise your premiums or non-renew your insurance policy.  If your driver’s license is suspended or revoked, your insurance company can cancel the policy
  • Choose your vehicle carefully.  Certain vehicles cost more to insure because they’re more likely to be damaged in an accident, cost more to repair, or are frequently stolen.  If you have a sports car or a high performance car you may have a hard time finding insurance at standard rates.  And if your car is a “street machine” or is “souped-up,” there’s an even greater chance that you’ll pay a lot more for your insurance.
  • Drive a vehicle with safety features.  Some companies offer a discount for such items as air bags, automatic seatbelts, and anti-lock brakes.
  • Maintain a good credit history.  Companies may consider your financial stability and charge higher premiums based on your financial status (i.e., credit card history, amount of credit, how timely you pay your bills, etc.

Turning the ripe old age of 16 enables your teen to obtain a driver’s license.  It is also the age for which they can legally enter the workforce in Illinois…a perfect way for them to help pay for the cost of driving.  Fasten your seat belts even tighter in experiencing another of life’s milestones…

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