Transportation: Owning a Car

Unit 5: Transportation

Lesson 3: Owning a Car

Topic 4: Other Expenses

OBJECTIVES

Identify other costs of owning a car.
Identify the total cost of owning a car.

MATERIALS
marker board or something to write on

SUPPLEMENTAL RESOURCES
Janus Life Skills: Shopping and Caring for Cars – A $7.95 workbook by Globe Fearon (1800 848-9500).

INSTRUCTIONAL FORMAT
This lesson will provide information about the costs of owning a car once it is purchased. For people who are on a limited budget, this is important information to think about when deciding to purchase a car.

Discuss additional costs of owning a car. Automatic costs are going to be license tags, gas, and maintenance of the car.
- At the time of the purchase and every year after, car owners have to pay a car tax to keep their cars registered. Because it is illegal to drive a car without paying this yearly tax, car owners are given a sticker to put on their license plate to signify that they are up-to-date. In general, a more expensive the car will have a higher tax. Taxes can be as little as $20 or as much as $100 per year (this is a rough estimate).
- Depending on how much driving the person does, he or she is most likely going to have to spend up to $10-$20/week for gas.
- Every three months, they will probably need to get the oil changed for about $25.
  
  So, for the basics, it could cost up to $1,000 a year, and that does not include other costs such as wiper blades, tune-ups, and other problems (dead battery, flat tire, transmission, etc.). You do not want to be discouraging, but people need to consider these costs. Another cost that people forget about is parking for work. Many companies have free parking. But some companies that are located in downtown areas do not have parking lots, and the employees need to park in public areas that cost money. Encourage the students to check out whether they need to pay for parking.
As a group, add up the costs of buying and maintaining a $5,000 car for three years. Figure out the costs of taking out a loan for three years at an 8 percent interest rate, and keeping the car insured (liability, comprehensive, and collision), maintained, and the taxes paid for three years. The students may need to do some investigative work to get the figures for these expenses, so a follow-up session may need to be scheduled. Write these figures on the board and divide the total by 36 months. This will provide a monthly payment for owning a car. Ask the students what they think of this figure. Ask how this compares to other transportation costs such as riding a bus.

SIGNS OF GENERALIZATION
Students will consider their budgets when deciding to purchase a car. Assuming nothing dramatic happens to their financial status, a student is able afford the costs of having a car.

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