The Cost of Owning a Vehicle
Canadians have a love affair with owning a vehicle, and a special romance with trucks. Almost 80% of the driving age population in Canada owns a vehicle – and 30% of those owners drive a truck, whether they can afford it or not.
The truth of the matter is, vehicles burn both gas and money. When it comes time to buy – you really need to consider the actual cost of car or truck ownership. The Canadian Automobile Association offers a driving costs calculator to help you better understand how much that vehicle will cost beyond the purchase price. The calculation includes fuel, license and registration, depreciation and maintenance and insurance costs. The insurance rates for this calculator are based on a driver in the average age range of 45.
Car buying today has changed from a decade or more ago. The length of car loans today is a particular problem. Financing a car over six to eight years just means that when you finally own that vehicle out right, it has very little to no value, and is usually ready to be replaced. Long term loans keep your monthly payments low, but you will find yourself in a never-ending car debt situation.
Purchasing a new car is one of the top contributors to today’s high personal debt levels and the lack of personal savings. Our busy lives, both parents working, kids involved in many activities requiring a commute etc, allows us to justify needing two cars, however, are we buying more cars then we can afford?
As with the purchase of a home, one needs to consider all expenses when purchasing a vehicle. Do not ignore your affordability limits. Actual insurance rates for our younger population make vehicle ownership almost unaffordable for that age group in Canada.
Insurance for Young Drivers
There are a few factors that come into play when calculating insurance rates; the basics are where you live, what you drive, and which insurer you use as a young driver. For the most part, gender does play a role – typically young males have always paid a higher rate for their insurance. However, the Ontario division of the Insurance Bureau of Canada (IBC) reports the rates for younger women are catching up to their male counterparts. IBC reports that higher insurance rates for this age group are related to the statistics – 8.3% of all the drivers in Ontario are between the ages of 20 and 24, and they accounted for 11.5% of injuries related to car accidents and 16% of fatalities.
Young adults that choose to own a vehicle have available to them a few ways they can save on insurance premiums:
- Buy a used vehicle.
- Stay away from car brands that are on the list of cars more likely to be stolen.
- Complete an approved driver training course.
- Use the good student discount.
- Look into the multivehicle discount – i.e. bundle with your parents.
- A clean driving record will give you the good driving discount.
Being an occasional driver on your parent’s vehicle is a great way for the young person to start building a history of being an insured driver. If you have questions about how to get the best rates, please call us at 1-800-361-0941.
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