Fixed Expenses Insurance As already discussed, before you can put a vehicle on the road, you must show proof of insurance. This is a fixed cost per year, although you can pay it in instalments. Many companies quote insurance rates for a six-month period. If you pay monthly, they may simply divide this amount by six. In many cases, however, they will charge an additional fee of 1–2% for the privilege of paying monthly. Ask your insurer to be sure. Driver’s Licence In Ontario, you must renew your driver’s licence every five years. This is a fixed expense. At the time of writing, the cost is $75 for a five-year licence. Plate Validation Sticker In order to have a vehicle on the road, licence plates must be validated by obtaining a validation sticker and affixing it to the upper right-hand corner of your licence plate. A renewal notice should reach you 60 days before the sticker expiry date (usually your birthday). You must renew your plates every one or two years.
Mathematics for Everyday Life MEL3E-B Lesson 12, page 3 Copyright © 2008 The Ontario Educational Communications Authority. All rights reserved. Emissions Test (Drive Clean Program) Ontario has introduced a “Drive Clean” program that requires cars to have an emissions test (also known as an E-test) to ensure that they do not produce excessive pollution. All light duty vehicles must pass an emissions inspection every two years in order to renew the licence plate sticker, if the owner and vehicle meet the following conditions: • the plate holder’s address is in one of the program areas • the vehicle is more than three years old, but less than 20 years old Heavy-duty commercial diesel-powered vehicles in the program area must pass an emissions test each year. If there are no problems, the test is a fixed expense. Maintenance Costs Maintenance costs can turn out to be expensive, especially if the car is an older model. Manufacturers recommend regular maintenance to keep a vehicle in good working order. It is better to consider maintenance a fixed expense. The following is a sample vehicle maintenance schedule. You will use these figures for all vehicle maintenance questions in this lesson. Sample Vehicle Maintenance Schedule Work Done Frequency (km) Frequency (months) Approximate Cost ($) Lube, oil, and filter 5 000 3 31.95 Tire rotation and brake inspection 10 000 6 24.95 Cooling system service 50 000 24 95.00 Wheel alignment 25 000 12 71.95
Lesson 12, page 4 Mathematics for Everyday Life MEL3E-B Copyright © 2008 The Ontario Educational Communications Authority. All rights reserved. Example 1 Imre has purchased a new car that will be his main vehicle. He calculates that in his first year, he will drive 25 000 km. Calculate his maintenance costs: a) for the year b) per month c) per 1 km Solution a) Lube, oil, and filter is done every 5000 km; therefore, the service will be performed five times a year (25 000 ÷ 5000 = 5).
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