Should I Buy My Teenager a Car?

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Buying a car for your teen goes beyond finances. You need to consider your teen’s level of maturity and responsibility, and think about their safety as well, when deciding if you should buy your teenager a car.

Here are some things to consider when you’re asking yourself, “Should I buy my teenager a car?”

The Pros of Buying a Car for Your Teenager

When considering whether you should buy a car for you teenager, consider the advantages and disadvantages of doing so.

Here are some of the advantages to buying your teen a car.

Independence

Having a car will provide your teen with additional independence and responsibility. They can:

• Drive themselves to and from school
• Participate in after-school activities or other extracurriculars
• Find a part-time job

They’ll learn valuable life lessons about self-reliance when they are responsible for their own transportation.

Access to Job Opportunities

Many part-time jobs require transportation, and parents may not be available to drive a teen to an after-school job. With their own car, a teen can drive themselves to work.

Convenience

Having a teen who can drive their own car is convenient for parents. Not only can the teen drive themselves, but they may also be able to drive younger siblings where they need to go as well.

Responsibility

Being a car owner requires responsibility. Your teen will learn how to maintain their vehicle by having the oil changed regularly and keeping the gas tank fueled.

Also, your teen will learn financial responsibility as well, especially if they are required to pay for repairs, insurance and other car-related expenses.

Cons to Buying Your Teen a Car

There are some drawbacks to buying a car for your teenager. Here are some things to consider.

Financial Burden

There is a financial implication to adding another car to the family fleet, such as:

• The initial cost to purchase the car
• The cost to finance it if you’re not buying it outright for cash
• The ongoing cost to maintain the vehicle
• The cost of insurance which, for a teen driver, can be significant.

Safety

All teen drivers present a safety risk — just ask any insurance company — but those who have their own car may feel even more invincible. Watch out for the, “it’s my car, I can do what I want” attitude.

Impact on Academic Performance

For some teens, a car can be an additional distraction that takes attention away from their studies. There’s freedom to go where they want, whenever they want, and that can be exciting. However, it can also compete for their attention.

Over time, any shift away from focusing on school work — whether or not a car is to blame — can impact academic performance.

Peer Pressure

If your teen is the only one in their friend group with a car, they may feel additional pressure to drive their friends where they want to go. This can be particularly risky, as having a group of friends in the car can increase distractions.

Young drivers — and younger people in general — can feel pressured to impress their friends and do things like speed or other daring maneuvers, so this is something to be cautious about.

Key Considerations Before Making the Purchase

There are several things you’ll want to consider before you finalize the purchase of a car for your teen. Here’s what you should think about.

Budgeting for Your Teenager’s First Car

The car’s price is likely the biggest question you’ll have. So you might be wondering, should you buy a new or a used car for your teen?

• New: Presumably safer, but will depreciate faster and is more expensive
• Used: More affordable, but may need repairs or more maintenance

Hidden Costs

The purchase price of a vehicle is only the beginning, as any car owner knows. You’ll also need to factor in taxes, fees to register the vehicle and potentially an extended warranty if that’s indicated. The list of features you can add on is limitless.

Ongoing Costs

Some of the ongoing costs to maintain a car are the same, regardless of how old you are. These include factors such as:

• Fuel
• Maintenance
• Repairs
• Compulsory inspections

Ask about discounts for teens who have taken driver education classes or who get good grades. You may also be able to get a discount for using an app that monitors driving habits.

Good To Know

Insurance is a cost every driver has to take on, but it can be even higher for teen drivers, especially males. Check with your insurance agent to see if it makes more sense to have your teen and their car on your policy, or to get them their own policy.

Safety Features

Safety features should be a top priority when you’re buying a var for your teen. Whether you decide to purchase a new car or a used on for your teen, look at safety features, such as:

• Anti-lock brakes
• Stability control
• Airbags
• Advanced-driver assistance systems

Newer vehicles tend to have more safety features than older models, but it can depend on the car.

The National Highway Traffic Safety Administration (NHTSA) has lots of resources for teen drivers. The NHTSA also rates cars for safety, so be sure to check out their recommendations for each vehicle you may be considering.

Set Expectations and Responsibilities With Your Teen Driver

Driving is a big responsibility, so be clear about expectations.

• Set firm limits: This should be for things like curfews, limits on passengers — including those imposed by driving laws in your state — and use of cell phones while driving, which should be an unequivocal “no.”
• Expenses: Discuss with your teen what expenses they will be responsible for, such as gas, maintenance and insurance. Make sure they have the ability to cover these costs.
• Driver’s ed: If you feel your teen needs additional driving instruction beyond the driver education courses they’ve already taken, you can make that a condition of getting a car.
• Consequences: Be clear about consequences in the event your teen doesn’t meet these expectations.

You set some additional ground rules, for example — if they drive with more than two friends in the car, they will lose the car for a week. If they get a speeding ticket, they won’t be able to drive for a month.

Whatever you feel is appropriate consequence for not following the rules, lay it out ahead of time and stick to it.

How To Buy Your Teenager Their First Car

Now that you’ve made the decision to buy your teenager their first car, here’s what you need to do.

Research Vehicles

1. Determine the budget, cost and must-have features for the car.
2. Find out and note which cars have that criteria.
3. Head to Kelley Blue Book to determine the price range you can expect to pay.
4. Once you’ve narrowed it down a bit, check local dealerships, car lots and online sites like CarMax or Carvana.
5. Check the vehicle history of any car you’re considering by asking for a Carfax report or going to VehicleHistory.gov.

The Buying Process

Now that you’ve identified a potential vehicle to buy, you’ll want to take it for a test drive.

Test Drive

Both you and your teen should drive the car — you want to be sure they’re comfortable driving it, and you might notice things a new driver may miss.

Negotiate the Car’s Purchase Price

If you’re buying from a dealership, a used car lot or an individual seller, you may be able to negotiate the price.

Point out any imperfections in the vehicle and ask if they’ll lower the price.

Ask for less than you expect to pay to give yourself room to meet in the middle.

Register the Vehicle

You and your teen will need to register the vehicle in your state. Requirements vary from state to state, so be sure you know what’s required in your state.

While it may be tempting to take over this part of the process, it’s a teachable moment for your teen to find out what you need to do and make it happen. If you’re purchasing from a dealer, they may do some of this paperwork for you.

Financing a Teenager’s First Car

If you’re not paying cash for your teen’s car, it will have to be financed.

There are several options for financing your teen’s first car. You can get a loan at a bank or credit union where you already do business, or finance through a dealership. You can also finance at a car lot that advertises “Buy Here, Pay Here,” but they often have higher interest rates.

Be clear with your teen about who will be responsible for making the payments. If the car is intended to be a gift, you can make the payments, but you may want your teen to have some skin in the game by making the payments themselves. You could also put down a down payment and finance the rest.

Should You Co-Sign Your Teen’s Car Loan?

Since teenagers typically have little to no credit history, you’ll likely need to cosign the loan. Even if your teen has some credit history, you will likely qualify for a better rate, so it may still make financial sense for you to cosign.

Making the Right Choice for Your Teen: Final Thoughts

There are many factors to consider when asking, “Should I buy my teenager a car?” The most important consideration is safety. Is your teen mature enough to handle the responsibility of a car? Are they a confident driver? Will they comply with the rules you make about having friends in the car, driving long distances, etc.?

The key is to have open, honest communication with your teen about the responsibilities of car ownership, and to enforce the rules you agree on with appropriate consequences. Learning about responsible driving and car ownership is a life lesson for your teen.

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