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CHAPTER 3
AUTOMOTIVE EXPENSES
THINK SAFETY
Budgeting for routine maintenance is important to your safety. Potentially hazardous situations
can be avoided by doing maintenance on your vehicle as recommended or required.
Objectives
After reading the Auto Upkeep text and complet-
ing the following activities, you will be able to:
Identify automotive expenses.
Identify ways to save money.
Describe insurance coverage levels.
Calculate specifc automotive expenses.
Summary
Automobiles are expensive to own. The fnan-
cial obligations to own and operate a vehicle
range from monthly car payments to insurance
premiums to unexpected repairs. Knowing your
budget and planning for routine maintenance and
unexpected expenses will prepare you for the
fnancial responsibility of vehicle ownership.
Key Terms/Internet Search Words
Use a search engine to investigate any of the
following terms or phrases. Summarize your
fndings in a research paper.
Allstate Insurance Company
American Automobile Association
(AAA)
American Family Insurance
Automobile Collision Insurance
Automobile Comprehensive
Insurance
Automobile Liability Insurance
Buying a Car
Cheap Gasoline Prices
Country Companies Insurance
Department of Motor Vehicles
Farmers Insurance Group
Gasoline Prices
Geico Direct
Hybrid Electric Vehicles
Insurance Companies
Progressive Insurance
State Farm Insurance
Towing Insurance

Web Exploring
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Name Class Date / / Score
Study Questions - Automotive Expenses
What are common automotive expenses? 1.
What are three things that your monthly car payment is dependent on? 2.
What is the minimum insurance policy that your state/province requires? 3.
What do the numbers 50/100/20 represent in an insurance policy? 4.
What does collision insurance cover? 5.
What does comprehensive insurance cover? 6.
How much would you spend on gasoline each year if you drove 10,000 miles over the year and 7.
your vehicle achieves 15 miles per gallon with gasoline priced at $2.75 a gallon?
Using the same scenario as question seven, substitute your vehicle with a hybrid-electric automo- 8.
bile that achieves 60 miles per gallon. Calculate the yearly cost for fuel with this vehicle.
How often do license plates need to be renewed in the state/province that you reside? 9.
Why is it important to keep up with routine maintenance? 10.
16 AUTO UPKEEP WORKBOOK
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Name Class Date / / Score
Automotive Expenses Activity
Objective
Upon completion of this activity, you will be able
to calculate automotive expenses.
Connections to NATEF General
Service Technician Tasks
None
Tools
Computer with Internet access, telephone, calcu-
lator (or use the calculator on the computer or a
spreadsheet program such as Microsoft Excel)
Supplies
None
Cautions
None
Directions
Check off the boxes when completed. When
you see a hand next to the task, write the
information in the activity journal. If you have
any questions during the duration of this activity,
stop and ask the instructor (if available) for
assistance.
Scenario 1
You have been saving for years for your first
car and have accumulated $2,500. Recently
you passed your drivers test and received your
license. Your parents have agreed to match the
amount of money that you have saved for your
car, so your budget is now $5,000. However this
sum of money needs to last you six months until
you get a summer job. You must calculate a six-
month budget that will cover the cars purchase,
insurance, fuel, registration, license, routine
maintenance, and $100 worth of unexpected
repairs. Your parents have decided that they dont
want you to take out any loans. Use the table in
the activity journal or a computer spreadsheet
program to organize the data that you collect.
Procedure 1 - Saved for Purchase
Log onto your computer and open up an In-
ternet browser.
Type in the following Internet address -
www.autotrader.com.
Look for possible vehicles. Remember that
you only have $5,000 to spend on the car
and expenses.
Note the manufacturer, make, model, year,
and engine size.
Note the cost of the vehicle.
Call your local Department of Motor Vehicles
(DMV) or check online for the cost of license
plates, registration, and title transfer fees for
the specifc vehicle you are researching.
Calculate the sales tax (if applicable) on the
vehicle. This tax is often collected by your
local DMV if you bought a vehicle from a
private party.
Example
$4,000 x .05 = $200
Vehicle Cost 5%
Sales Tax
Sales
Tax
Screen Capture from www.AutoTrader.com
17 CHAPTER 3 AUTOMOTIVE EXPENSES
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Complete research to identify the cars fuel
effciency in miles per gallon or L/100 km.
Visit or call local gas stations to fnd out the
average price of fuel.
Calculate six-month expenditure on fuel
costs if you travel 1,000 miles (1,609 km)
a month or use an online calculator (e.g.,
www.fueleconomy.gov) to assist you.
Example MPG
200 x $3.00 = $600
6,000 Miles
Fuel Efficiency
of 30 MPG
Price of Fuel
per Gallon
6 Month
Fuel Costs
Example L/100 km
757 x $1.00 = $757
(9654 km 100)
x Fuel Efficiency
of 7.84 L/100 km
Price of Fuel
per Liter
6 Month
Fuel Costs
Call a local insurance agent or check online
for the cost of a six-month liability policy.
Your parents want you to have 100/300/50
coverage. Gather at least three quotes from
different insurance companies. Choose a
policy from a company that best meets your
needs.
Budget for two oil and flter changes in the
six-month period. Include labor costs if you
do not intend to complete the service. Call
repair facilities for estimates.
Budget for one major tune-up in the six-
month period. You will need to calculate
the cost for spark plugs, spark plug wires (if
applicable), distributor cap (if applicable),
distributor rotor (if applicable), air flter, and
fuel flter. (Note: A distributorless ignition
system does not have a cap or rotor. Coil-on-
plug (COP) ignition systems will not have
spark plug wires.) Include labor costs if you
do not intend to complete the service. Call
repair facilities for estimates.
Calculate your total car expenditures. To do
this, add the following.
Vehicle Cost
License Plates, Registration, and Title
Transfer Fees
Sales Tax on Vehicle
Fuel Costs for Six Months
Insurance for Six Months
Two Oil Changes
Tune-Up
Unexpected Repairs (Estimate $100)
Compare your total car expenditures with the
amount of money ($5,000) that is available.
Log off your computer.
Screen Capture from www.fueleconomy.gov
18 AUTO UPKEEP WORKBOOK
COP
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Name Class Date / / Score
Scenario 2
You have not saved much money for your frst
vehicle, but you have recently started working a
part time job clearing $7.00 an hour. Your parents
have offered to give you $1,000 towards your
frst vehicle and will co-sign a loan with you for
another $4,000. Now you have $5,000 to spend
towards a car. Your job should cover the loan
payment and the costs for the monthly expenses.
You purchased a vehicle for $5,000 including the
sales tax. You are curious to calculate how many
hours a month you need to work to keep your car
operational. Your goal is to calculate the average
monthly cost of owning this vehicle. Use the table
in the activity journal or a computer spreadsheet
program to organize the data that you collect.
Procedure 2 - Loan for Purchase
Use an online loan payment calculator
(keyword: loan calculator) to determine the
monthly payments on a $4,000 loan for 48
months at the current interest rate.
Call a local insurance agent or check online
for the cost of a six-month liability policy.
Your parents want you to have 100/300/50
coverage. Since you have a loan on the car,
the lending institution will also require col-
lision and comprehensive coverage. Gather
at least three quotes from different insurance
companies. Choose a policy from a company
that best meets your needs.
Calculate the cost of the insurance policy on
a monthly basis.
Example
$600 6 = $100
Insurance for
6 Months
Months Insurance Cost
per Month
Complete research to determine the fuel
mileage per gallon (mpg) or L/100 km of the
chosen vehicle.
Visit or call gas stations to determine the cost
of fuel per gallon.
Calculate your monthly expenditure on fuel if
you travel 1,000 miles (1609 km) a month.
Example MPG
33.33 x $3.00 = $99.99
1,000 Miles
Fuel Efficiency
of 30 MPG
Price of Fuel
per Gallon
Approximate
Fuel Cost
per Month
Example L/100 km
126.15 x $1.00 = $126.15
(1609 km 100)
x Fuel Efficiency
of 7.84 L/100 km
Price of
Fuel per
Liter
Fuel Cost per
Month
Pro-rate (per month) the cost for licensing
and registering. Call your local Department
of Motor Vehicles (DMV), Motor Vehicle Ad-
ministration (MVA), or check online for the
cost of license plates tags and registration fees
for the specifc vehicle you are researching.
Example
$120 12 = $10
Annual
License &
Registration
Months License &
Registration
Cost per Month
Traveling 1,000 miles (1609 km) a month will
determine that your vehicle will need an oil
change every 3 months. Pro-rate (per month)
the cost of an oil change.
Example
$30 3 = $10
Oil Change
Price
Months Oil Change
Cost per Month
Screen Capture from www.Quicken.com
19 CHAPTER 3 AUTOMOTIVE EXPENSES
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Pro-rate (per month) the cost of a tune up. You
will need to calculate the cost for spark plugs,
spark plug wires (if applicable), distributor
cap (if applicable), distributor rotor (if ap-
plicable), air flter, and fuel flter. (Note: A
distributorless ignition system does not have a
cap or rotor. Coil-on-plug (COP) ignition sys-
tems will not have spark plug wires.) Include
labor costs if you do not intend to complete
the service. Call repair facilities for estimates.
Estimate that your vehicle will need a major
tune-up every two years.
Example
$240 24 = $10
Tune-Up Cost Months Tune-Up
Cost per Month
Pro-rate (per month) the cost for one set of
tires. With your driving habits, you will need
to buy a new set of tires every four years.
Check online or with a local tire distributor for
the cost to replace the tires for your vehicle.
You want to buy 50,000 mile (80,470 km)
tires with the following minimum UTQG rat-
ings: Traction A, Temperature B, Treadwear
400. You also want new valve stems installed,
the tires mounted and balanced, and the old
tires properly disposed.
Example
$480 48 = $10
Set of 4 Tires
Cost
Months Tire
Cost per Month
Pro-rate (per month) the cost for one battery.
You live in a harsh climate and will probably
need a new battery in the next four years.
Check online or with a local battery distribu-
tor for the cost to replace the battery in your
vehicle.
Example
$48 48 = $1
Battery Cost Months Battery
Cost per Month
Pro-rate (per month) the cost for new wind-
shield wiper blades. You will probably need to
replace your wiper blades every year. Check
online or with a local parts distributor for the
cost to replace the wipers on your vehicle.
Example
$12 12 = $1
Set of 2
Wiper Blades
Months Wiper Blades
Cost per Month
Pro-rate (per month) the cost for two new
headlamp bulbs in the next four years. Check
online or with a local parts distributor for the
cost for two new headlamp bulbs.
Example
$16 48 = $0.33
Set of 2
Headlamps
Months Headlamp
Cost per Month
Pro-rate (per month) the cost for one complete
brake job in the next four years. Check online
or with a local service facility for the cost to
replace the brake pads/shoes and resurface
the rotors/drums.
Example
$240 48 = $5
Cost for Brake
Job
Months Brake Expense
Cost per Month
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Activity Journal
Complete the Procedure 1 table below or organize your data in a computer spreadsheet program. 1.

Vehicle Information
Manufacturer
Make and Model
Year
Engine Size
Fuel Effciency (MPG or L/100 km)

Six Month Budget Cost
Vehicle Cost
Six Month Cost of License Plates, Registration, and Title Transfer Fee
Sales Tax = Vehicle Cost x Sales Tax Percent in decimal form
Price of Fuel per Unit Measure (Gallon or Liter)
Six Month Fuel Expenditure if you travel 1,000 miles (1,609 km) a month
Fuel Costs = (6,000 miles/Fuel Effciency in MPG) x Price of Fuel per Gallon or
Fuel Costs = ((9,654 km/100) x Fuel Effciency in L/100 km) x Price of Fuel per Liter
Cost of Six Month Liability Insurance Policy Quote 1
Quote 2
Quote 3
Quote Chosen
Cost of Two Oil and Filter Changes (Include Labor Costs if Applicable)
Cost of One Major Tune-up (Include Labor Costs if Applicable)
Unexpected Repairs $100.00
Estimated Total Car Expenditures
$5,000 Budget - Total Car Expenditures = Amount Under or Over Budget
Calculate your total monthly expenses by
adding the following:
Monthly Car Payment
Monthly Insurance Cost
Monthly Fuel Cost
License Plate Tags and Registration
Fees Cost Pro-Rated Monthly
Oil Change Cost Pro-Rated Monthly
Tune-Up Cost Pro-Rated Monthly
Tire Cost Pro-Rated Monthly
Battery Cost Pro-Rated Monthly
Wiper Cost Pro-Rated Monthly
Headlamp Cost Pro-Rated Monthly
Brake Job Cost Pro-Rated Monthly
Miscellaneous Monthly Car Ex-
penses
Calculate the minimum number of hours you
need to work each month to keep your car on
the road.
Example
$210 $7 = 30
Total
Monthly
Expense
Hourly Income
After
Withholdings
Hours
Needed to
Work
Log off your computer.
21 CHAPTER 3 AUTOMOTIVE EXPENSES
Rotor Brake
Pads
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Complete the Procedure 2 table below or organize your data in a computer spreadsheet program. 2.

Vehicle Information
Manufacturer
Make and Model
Year
Engine Size
Fuel Effciency (MPG or L/100 km)

One Month Budget Cost
Current Interest Rate
Monthly Payment on $4,000 loan for 48 Months at Current Interest Rate
Cost of Monthly Liability Insurance Policy
Monthly Policy = Six Month Policy/6
Quote 1
Quote 2
Quote 3
Quote Chosen
Monthly Cost of License Plates, Registration, and Title Transfer Fee
Price of Fuel per Unit Measure (Gallon or Liter)
One Month Fuel Expenditure if you travel 1,000 miles (1,609 km)
Fuel Costs = (1,000 miles/Fuel Effciency in MPG) x Price of Fuel per Gallon or
Fuel Costs = ((1,609 km/100) x Fuel Effciency in L/100 km) x Price of Fuel per Liter
Cost of License Plates, Registration, and Title Transfer Fee Pro-Rated Monthly
Oil Change Cost Pro-Rated Monthly
Tune-Up Cost Pro-Rated Monthly
Tire Cost Pro-Rated Monthly
Battery Cost Pro-Rated Monthly
Wiper Cost Pro-Rated Monthly
Headlamp Cost Pro-Rated Monthly
Brake Job Cost Pro-Rated Monthly
Miscellaneous Monthly Car Expenses $16.00
Estimated Total Monthly Car Expense
Hours Needed to Work per Month = Total Monthly Expenses/$7.00

Why should you obtain several insurance quotes? 3.
What is the second most costly pro-rated monthly expense? 4.
Why is it important to budget for expenses? 5.
How could you reduce your monthly expenses? 6.
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