I’ve been working at a car dealership for the last three years, which explains how I manage to keep my maintenance costs relatively low on such an old vehicle—I get a discount on service. Look around and find a mechanic you trust, who also offers fair prices. Getting some of the major work done at a dealership would have cost me more than double what I ended up paying at independent shops. Having a better-than-average understanding of maintaining a car will also give you a significant advantage in the long run—if you aren’t afraid to get your hands dirty, there are thousands of resources online which can teach you to work on your own car and help you identify issues that need attention, potentially saving you hundreds or thousands of dollars, on top of the satisfaction of fixing or maintaining something yourself. (For example, many people handle their own seasonal tire changes.)
Insurance and registration fees
There are numerous ways to save money on insurance if you take the time to consider the dozens of discounts you might qualify for. Factors such as what kind of car you drive, how old it is, your age, sex, where you live, your driving record, and even your grades are just some of the things to consider when shopping for the best premium. Insurance will vary significantly based on your lifestyle—but as a student and young driver, you can expect your rate to account for one of the pricier areas of your budget, if not the most expensive.
I’m extremely fortunate that my parents help pay the cost of insurance on my car, since it is personally by far the most expensive payment that has to be made each year. It can help to remember that even if you aren’t driving much and your car is just sitting in the driveway, it can still be costing you a lot of money just to keep it insured. Try not to rush the process of shopping around for the best insurance rates, and consider the fact that certain lifestyle choices and failing to plan ahead could result in your paying much more than you have to over time.
Registration fees can be an easy thing to forget about as a new driver and doing so might result in you having to pay a hefty fine if you get pulled over. Each year, you have to renew your vehicle’s licence plate sticker, which will cost $120 for Southern Ontario residents, and $60 if you live in Northern Ontario. (Check with your provincial ministry of transportation for specific costs where you live.)
Depreciation is the steepest cost associated with owning a new vehicle, according to D’Arbelles, accounting for roughly half of the ownership costs associated with owning a vehicle. It’s also one of the most overlooked expenses. When you purchase a vehicle, you’re purchasing an asset that depreciates over time—meaning towards the end of your car’s life cycle, it will be significantly less valuable than the price you paid for it. (I was lucky not to have to pay for the use of my family’s Honda, so depreciation isn’t a factor in my ownership costs. If it was, I likely would have been much more hesitant about owning a vehicle.)
Since depreciation gets less significant as the car ages, buying a used car that holds its value well can be a wise choice.
Parking and tires
These two costs will vary depending on where you live.
If you don’t have a private driveway or if you use the school’s parking lot frequently, prepare to pay a sizeable amount of money on parking permits. You can avoid paying expensive parking fees at school by parking on residential side streets instead, which may be a little bit farther from class, but worth the time for the money you’ll save, in most cases.