My Money - Spending It
About That Car
It’s great to have your own wheels, but a car will cost money!
Have you ever considered that the money you save by not having a car could help pay for college? With a college education and a good-paying job, you could easily buy a really nice car—you’ll just have to wait for a while. What do you think?
Test Your Knowledge!
Take this quick quiz to see what you know about buying, paying for, and insuring a car. Give yourself one point for each correct answer.
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| 1. You have found the car of your dreams. Now you need to get auto insurance (it’s the law), but prices seem awfully high. How can you lower your insurance rates? |
A. Raise your deductible, which is the amount you pay if you’re in a car wreck before the insurance company pays.
B. Maintain a "C" average at school.
C. Buy an expensive, newer car—it's safer and costs less to insure
D. Don't bother to shop around; the rates are all the same
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| 2. You are 17, have a part-time job during school (full-time in the summer), and want to get a loan to buy a car. Will your parent, guardian, or another responsible adult have to co-sign the loan with you? |
A. Yes
B. No
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| 3. Which teen is likely to get the lowest insurance rate? |
A. A 17-year-old girl who has a good driving record, good grades, and drives a used, four-door car
B. A 17-year-old boy who has a good driving record, good grades, and drives a used, two-door car
C. An 18-year-old girl who has had two speeding tickets and drives a used, two-door car
D. An 18-year-old boy who has a good driving record and drives a new, two-door car
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| 4. Which car will probably cost the least? |
A. A new, two-door car that is painted an ugly color
B. An older, four-door car
C. An older, two-door, sports car
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| 5. What will usually save you the most on full-coverage auto insurance rates? |
A. Going from a $500 to a $250 deductible
B. Buying a two-door instead of a four-door car
C. Lots of passive safety devices (such as airbags and anti-lock brakes)
D. A perfect driving record
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| 6. Building and maintaining a good credit history are important for all but one of the following reasons. Which reason is incorrect? |
A. It affects your ability to get a car loan.
B. Without good credit, you may have to pay a higher interest rate on a loan.
C. It impresses your friends
D. Some auto insurers consider your credit history when setting your insurance rates or deciding whether or not to insure you.
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| 7. Besides the cost of buying a car, what other expenses will you have? |
A. Car insurance
B. Car registration and license plates
C. Gas and repairs
D. All of the above
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| 8. What is the difference in liability-only and full-coverage auto insurance? |
A. Full-coverage insurance will help replace your car if you cause an accident; liability-only insurance coverage won't.
B. Liability-only insurance pays repair bills for everyone in the accident; full-coverage only pays if it wasn't your fault.
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| 9. Which of the following individuals is a co-signer? |
A. Your best friend
B. Someone over 18, with a good credit history, who is willing to be responsible for your car loan if you miss the payments
C. A Bank Officer
D. Someone at the credit bureau
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| 10. What percentage of fatal accidents for drivers ages 16 to 19 involve driver error? |
A. 25 Percent
B. 55 Percent
C. 70 Percent
D. 80 Percent
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ANSWERS:
1-A, 2-A, 3-A, 4-B, 5-D, 6-C, 7-D, 8-A, 9-B, 10-D
How did you do?
1-3 points: You need to do some serious research before you consider purchasing a car.
4-7 points: You've got the basics down, but you need to know a little more about how to buy, insure, and pay for your car at the best rates!
8-10 points: You're ready to "hit the road," and you know the basics about how to find the best insurance rates and cars when you head out!
Source: Adapted from the NEFE Teen Resource Bureau www.ntrbonline.org, 2005
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