September 9th, 2011

The Real Cost of Living in the Fast Lane

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Every year, 41 million speeding tickets are given out, reports TheAutoInsurance.com, which means that at every second of every day some unlucky speed racer-type is getting a ticket. I was one of the unlucky ones.

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When you hear that unmistakable siren shriek and glance in the rearview mirror to see the flashing lights directly behind your car, a lot of thoughts start running through your head.

    “How fast am I going?”
    “What laws did I just potentially violate?”
    “Is he really after me?”
    “Oh [insert your own expletive].”

Yet the one thought that really stuck with me—besides the answers “87 mph,” “highway speed limits,” “Yes he is,” and “Oh crap”—was, “How much is this going to cost me?”

A few Saturdays ago when I was pulled over for the first time, I tried to get out of what would likely be a very expensive speeding ticket.

    “I didn’t realize I was going so fast, Officer. I’m meeting my parents… at church.
    “On a… Saturday?”
    “Yes, I’m Catholic, we have… extra church days.”
    “I’m Catholic.”
    “Well… then you know what I’m talking about.”
    Silence.

If you’re wondering, no, most Catholics don’t have extra church Saturdays (that I know of).

As the cop walked away and promised an expensive present in my mailbox in 2 to 3 weeks, I started going over the “real” costs of this speeding ticket:

  • VC Unsafe speed, 16 to 25 over the limit: $328
  • VC Failure to notify DMV of address change within 10 days: $214
  • Increase in auto insurance rates: $360

Keep in mind that these are all rough estimates, and yes, I received two tickets. Let’s not go into those details right now.

That increase in auto insurance rates is calculated from the fact that car insurance rates typically soar after moving violations. Insurance.com reports that drivers with a one-car, single-driver policy with just one violation in their driving history (that’s me) pay an average of 18% more for car insurance than drivers with no violations. That 18% bump from my annual insurance rate will cost me $360.

These three costs alone have my wallet $902 in the hole, although hopefully traffic school and proof of correction could lighten my fees.

Of course, there are other costs: the time it takes to go to traffic school, the effort and time needed to contest the ticket in court, as well added points on my driving record that could further drive up my insurance premiums.

The biggest financial lesson I learned from my first speeding ticket is to build out a small emergency fund to cover unforeseen costs from mistakes like this. I’ll call it the Oops Fund, for traffic tickets, accidental mishaps, and emergency purchases. Since my budget will feel pretty tight after paying off the speeding ticket costs, it’s a telltale sign that I should financially expect the unexpected.

Also, as a side note, I learned not to speed on the last weekend of the month. I was ticketed on the last Saturday of the month, and saw no less than 20 cops pulling people over on the freeway on that one hour drive. Shocking coincidence.

Keep living life in the fast lane if you like to live on the edge (of debt), but I think I’m going to play it safer with my Oops Fund and paying extra special attention to highway speed limits.

Keep up the Karma,

Justine Rivero, Credit Advisor

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5 Comments

  1. Not an easy lesson to learn. I definitely agree that keeping an emergency fund to cover unforeseen, and unplanned for, events is the best way to avoid putting unnecessary strain on finances. And save yourself a little stress along the way.

    Hannah Lee at 10:26 pm on September 11, 2011
  2. Don’t forget that if you have an umbrella policy on your homeowners policy, your driving record can impact the cost &/or availability of that umbrella coverage.

    In addition in increasing your insurance rate, Texas has a “points” system on your driving record & if you have more than X points in a 3 year period (about a citation a year), then the State sends you a bill for an administrative fine in addition to the traffic fine & court costs you paid for the citations. You have to pay the Points fine for each year your points are over the allowed amount, and if you don’t, the State can change your license status to “Invalid” until you pay. If you get pulled over and receive a citation with an invalid license, the fine amount for DWLI is $500.

    But we don’t have a state income tax & Perry’s cutting the business income tax. Yay . . .

    James Shaffer at 1:36 pm on February 4, 2014

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