Driving-Tests.org delves into the real cost of car ownership for teenage drivers and their families as part of a special investigation on teenage driving
WASHINGTON--Nov. 19, 2013: What's going on with today's teenagers? According to recent studies, today's teens are waiting longer to get their driver's licenses, and, once licensed, are driving fewer miles than in previous years.
Some experts think that today's teens are too busy playing Candy Crush to hit the road. Other researchers argue that this generation - also known as "Millennials" - prefers to ride their bikes, walk or even use public transportation out of concern for the environment. While it is true that smart phones and social media make it easier for today's teens to keep in touch without ever leaving their home, and, today's teens are undeniably the most eco-conscious generation in history, a much more significant factor in influencing today's teenage drivers may be economical: meaning, it is just too expensive to own and operate a vehicle.
In an effort to understand the steady decline in licensed teenage drivers (currently, fewer than than 70% of American 19-year-olds currently hold a valid driver's license, down from 87% in 1983), the online driving education experts at Driving-Tests.org launched a special investigation into the real costs of car ownership for teenage drivers.
The Real Cost of Car Ownership for Teenage Drivers
Although many first-time car buyers look at the purchase price of a vehicle and assume that it is the only expense they need to take into consideration. Unfortunately, the real cost of purchasing and operating a vehicle includes many often underestimated expenses - including insurance, gasoline, repairs, regularly-scheduled maintenance, parking, tickets, tolls, taxes, tags and title fees - that can still have a significant impact the monthly household budget.
So now, how much does it really cost for a teenager to own and maintain a car? Many teens appear to agree that the cost is "too much." In fact, at least 32% of all teens surveyed in 2013 study by the University of Michigan Transportation Research Institute (UMTRI) indicated they did not have a driver's license because "owning and maintaining a vehicle is too expensive."
According to the analysis conducted by Driving-Tests.org, owning and maintaining a used vehicle (from 2009) can cost the average teenager upwards of $6,968 per year. Even teens who just "borrow" the family car face operating and maintenance costs of at least $2,741 per year. That's a lot of money either way, especially for teenagers who are juggling school-work and the many extra-curricular activities that play an increasingly important role in college admissions.
How do these costs add up? Driving-Tests.org calculated the average cost to own and operate one of the a used vehilcles selected by MSN Money Magazine in June 2013 as being one of the 14 "Best Cars for Teen Drivers." The average sales price for a top-rated used (from 2009) car for teenage drivers is $11,849 and boasts a fuel economy of 25 MPG. Monthly operating costs are as follows:
$261 in Monthly Financing Costs
$202 in Monthly Insurance Premiums
$86 in Monthly Gasoline Expense $32 in Monthly Maintenance Costs
The total estimated cost for a teenager to own and maintain a car can be as high as $581 per month.
There are some additional factors that might influence the cost of maintaining a vehicle for a teenage driver:
Although the average US teenager drives 7,624 mile per year, teenage boys drive further than - an additional 1,333 annually according to recent USDOT data - which increases gas and maintenance expenses.
Teenage boys also have higher insurance premiums - as much as 25 percent over a female of the same age - because they are more likely to speed, crash and drive while intoxicated or high on drugs.
Driving-Tests.org did determine that there are several ways to offset of the car ownership and maintainence costs. The following options can benefit teens by helping to reduce the cost of gasoline and insurance premiums:
Buying hybrid vehicles
Getting good grades
Although the thought of waiting to get a driver's license seems odd to most adults, it is a sign of our changing times. The digital age has made it possible for teens to keep in touch virtually thereby reducing the need to connect in person. Many young adults are choosing to live closer to work and are using public transportation with greater frequency, thereby eliminating the need for a vehicle for daily use. Lastly, and, perhaps most importantly, the expense of car ownership and maintenance may be prohibitive for some teens while other millennials - considering the ease of virtual communications - may simply decide to forgo the additional expense.
This trend doesn't show any signs of shifting anytime soon, and, the economic impact of the continuing decline in licensed drivers merits further exploration before drawing conclusions on the consequences for the future.