Hidden Costs of Car Ownership: What Every Buyer Should Know
When envisioning their first vehicle, many students focus primarily on the car’s sticker price and the associated monthly payment. However, they often overlook additional expenditures, such as approximately $225 monthly for insurance and around $138 for maintenance. Together, these expenses amount to roughly $363 each month, constituting nearly 50% of the average monthly car payment. This total does not even factor in fuel costs and taxes.
In a detailed MarketWatch article, Genna Contino reveals that since 2020, car insurance rates have surged by approximately 55%, while maintenance and repair expenses have risen by about 47%. These increases outstrip the growth in car prices themselves. The article also offers insights on how prospective buyers can effectively budget for the comprehensive costs of car ownership before making a purchase.
[Image credit: MarketWatch photo illustration/iStockphoto]
Additional Resources
Access the following materials:
MarketWatch Article |
NGPF Student Reading Guide + Answer Key
Estimated reading time: ~7 minutes (1,221 words)
Discussion Points
Utilize these questions to foster discussion after the reading:
- With insurance and maintenance now comprising approximately 50% of an average monthly car payment, how might this awareness influence your future budgeting strategies for a car?
- The article suggests that some lower-income individuals find themselves compelled to buy cars they cannot truly afford for employment purposes. What solutions do you propose to address this issue?
This reading aligns well with NGPF’s Buying a Car Unit.
About the Resource
This educational resource has been developed in collaboration with Dow Jones, facilitating access to high-quality financial journalism for personal finance classes nationwide at no cost.
Every WSJ Wednesday, NGPF highlights a classroom-ready article, video, or data resource from the Wall Street Journal, MarketWatch, or Barron’s, which includes a student guide, discussion questions, and an answer key.
About the Author
Yonathan Tadesse
Yonathan is a Curriculum Designer based in Dallas with over 12 years of experience in high school math, college transition, and financial literacy education. As an accomplished educator, he is recognized for implementing innovative programs that enhance access and opportunities for students. A graduate of Emory University, Yonathan is committed to promoting financial literacy for all students. In his personal time, he enjoys engaging in activities with his wife and two children, exercising, playing chess and poker, and pursuing new knowledge.
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