Car ownership costs add up in New York

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ALBANY — The $25 fee tied to a proposed mandatory license plate replacement plan – that was abandoned amid an uproar across the state  – represented just a fraction of what it costs to be a car owner in New York.

The mandated expenses on a typical vehicle can easily add up to more than $1,700 a year, with New Yorkers paying some of the highest auto insurance premiums and gasoline taxes in the country — on top of recurring state fees.

The costs are primarily a consequence of New York’s laws, such as minimum insurance requirements, tax rates and state fee structures. A few minor expenses, such as replacing license plates, are at the discretion of Gov. Andrew M. Cuomo’s administration, which has continued rates set by previous administrations.

State Division of Budget spokesman Freeman Klopott said most automobile expenses stem from decisions made by Cuomo’s predecessors and the state Legislature.

The largest recurring bill for drivers is car insurance, which cost an average of $1,301 per vehicle in 2016, based on the most recent data compiled by the National Association of Insurance. The national average that year was about $936 and neighboring New Jersey topped the list at $1,309.

New York Insurance Association President Ellen Melchionni said the insurance costs are driven by state laws mandating coverage, such as liability and personal injury protection, and warned that proposals being considered by state lawmakers to raise mandatory liability coverage will increase costs.

She also noted a change in state law requiring insurance policyholders to opt out of extra coverage to protect against drivers with inadequate coverage. “The opt-out mechanism undoubtedly creates confusion and can mislead people into purchasing coverage that was designed to be optional,” Melchionni said.

Klopott said insurance rates reflect a “multitude of factors,” and vary by region based on risks and costs.

The second-largest required cost is the 45.96-cent tax New Yorkers pay per gallon of gasoline, which works out to a bill of nearly $360 a year for a car with a 15-gallon tank filled up once a week.

The state’s tax rate is the seventh-highest in the country, according to data compiled by the Tax Foundation. California tops the list at 61.20 cents a gallon and Pennsylvania is the highest in the Northeast at 58.7 cents a gallon.

The recurring fees that drivers pay in New York include at least $64.50 to renew a standard driver’s license every eight years, between $26 and $140 to renew a vehicle’s registration every other year and about $21 for annual safety and emissions inspection.

New Yorkers who want to replace their license plates need to pony up $25 – plus another $20 to keep their plate number. These fees are capped by a 2009 state law and set by the state Department of Motor Vehicles.

This was going to be a required expense – starting next year for plates that are at least 10 years old – but Cuomo backed off the mandate and indicated plans to work with state lawmakers to craft a new way of ensuring drivers have legible plates.

New Yorkers also pay an annual $10 motor vehicle law enforcement fee per vehicle that is intended to fund auto insurance theft and fraud prevention, according to Melchionni. “In reality nearly all of the money is used for general law enforcement expenses,” she said.

Klopott said the portion of funds directed to the State Police for highway safety and public security is prescribed by state law.

“Under this administration we have directed the revenue derived from those costs to the right places – reinvesting in our roads and bridges, and helping law enforcement keep New Yorkers safe,” Klopott said.

David.Lombardo@timesunion.com – 518.454.5427 – @poozer87

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