How Much Will It Cost When Your Son Or Daughter Starts Driving?

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How Much Will It Cost When Your Son Or Daughter Starts Driving?

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Entrepreneur Series Lesson 1: Being Undercapitalized

June 12, 2013

It’s hard to imagine for most parents that their son or daughter will be ready to get their driver’s license someday.    In fact, I think this ritual is a little bit like the birthing process.   Nature in part prepares you for very little sleep when the baby is born by making it very difficult to sleep in that last trimester.    As much as your stomach will go through the spin cycle the first time your son or daughter leaves the driveway all by themselves, there is also an overwhelming sense of relief for you to remove the chauffeur cap that you have rightly earned the years preceding your son or daughter getting their driver’s license.    While most families prepare for the magical day when their children get their rite of passage to begin driving, they often don’t consider the extra costs that may hit their family budget.   How much will it cost when my child starts driving?

  1. Learners Permit- This usually isn’t a huge expense in most states.   For the state of Georgia it is $10.
  2. Driving School- Driving School prices range all over the place, but in the state of Georgia you have 30 hours of classroom instruction and 6 hours of private in-car lessons which is the bare minimum your child needs to take.  Obviously, you can spend more money to get additional training if you aren’t ready for some white knuckle moments.   Your cost is going to be with the $400 to $600 range and there is availability for a Georgia state tax credit.   If you use additional hours, it could push $1000.    You will also need to factor in your time in the state of Georgia for the 40 hours of tutorial instruction you need to provide for your child.
  3. Driver’s License Cost- This will depend on your state, but the cost in Georgia is around $30 to get a license once the road skills test and other requirements have been meet.
  4. The Dreaded Car Question- This is probably the largest conundrum for most families.   Do I get my child a car of their own or do they use one we have in the family already?   I highly recommend against getting your child a new car or something fancy that will stroke their ego when they drive it on the high school parking lot.  No BMW’s, Lexus’, or Hummers allowed.   It will completely set the wrong expectations for them for the rest of their lives.    Either make your child buy a used car of their own or you (or a relative) can help find a ‘safe’ used car that can be used for your child.    If you are going to purchase car, this can have a significant impact on your savings or within your monthly cash flow.
  5. Insurance- Next up will be adding your child as an addition to your family automobile insurance.   There are many ways to potentially keep your premium down when you add a new driver, but expect that your insurance will go up by $1,000 a year.   If you have more than one child driving, it could go up by several thousand a year.  There are many factors that could lower premium or raise premium which I will review in another blog post.
  6. Gas- Many parents don’t get into a discussion early about the cost of gas.  With premium gas prices going up to the $4.00 range, the cost to fill up a tank of gas could be $80 to $100 at one time.   The big question will be who pays for gas?    I recommend you set expectations up front that your kid is responsible for the gas.   This will teach them the cost and the responsibility early in the process.

There can certainly be other costs including that your son or daughter will start to eat out a lot more with their friends and go to the mall more now that they can get from Point A to Point B without having to ask you to drop them off and pick them up.    It’s best to sit down as a parental unit to discuss all of these costs so you present a united front when you talk with your kids about who is responsible for what cost.   Most importantly, make sure you plan out these costs in your household budget or your other goals may quickly get a flat tire.

Written by:
Ted Jenkin

Request a FREE consultation: www.oxygenfinancial.net

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS.

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