This is a controversial issue in many families and a lot of times, the parents are split in their ideas. I believe that parents should address this issue very early so that there are no surprises when the teenager reaches driving age.
Remember: the cheapest car you will ever own is the one you’re presently driving! Despite what marketing companies and manufacturers say, the only cars that gain value are antiques. Certain cars do depreciate more slowly than others, but no cars really appreciate in value. If you’re teaching your children the importance of investing in appreciating assets, you’re already ahead of the game. How you and your teenager view a car will determine the decisions you make and how you make them.
Cars are for transportation first and foremost, but 16 year olds think they are for style. The difference in price between style and functionality is staggering. Make sure your teenager understands the high price of style. Compare prices with them on a 2002 Jeep Cherokee and a 2008 Ford Mustang convertible. The difference can be staggering.
Why are you buying the car? Convenience? Whose convenience? If the car is for the parent’s convenience, the parent should buy it, insure it, and pay for the associated expenses. Many parents look forward to the oldest child getting their driver’s license so he or she can ferry the younger children to baseball practice, ballet, the school play, to and from school, etc. If the children don’t like the choice of vehicles, or if they want something else, they should buy the car and pay for its expenses.
I believe that teenagers should have some ownership in the car. They should have some “skin in the game” from a monetary standpoint. It is just human nature to take better care of the things we work for as opposed to the things that are just given to us. Having a car is not a right, it’s a privilege. You teenager isn’t entitled to a set of wheels and they should have to work to get the one they want. If they aren’t willing to work, then you get to pick the car.
I have told my children that I will match the amount they have saved to buy a car when they get ready to make that purchase. I don’t want my teenager to go into debt, but I also don’t want my daughter driving a $1,000 unsafe clunker, so I plan on helping her. After all, my peace of mind has its own value.
Sometimes grandparents are willing to help. If you’re in this fortunate position, don’t let your pride stop a grandparent from having the joy of helping their grandchild. But also make sure the grandparent understands your values and your standards. The car should be appropriate for the teenager at their responsibility level. If you drive a 10 year old Honda, it really isn’t appropriate for your teenager to have a 2008 Lexus from the grandparents.
When looking at potential vehicles consider:
- Maintenance costs. How much does an oil change cost? New brakes? A general tune up?
- Larger expenses. How much will tires cost? What about insurance?
- Gas mileage and how many miles the child will be driving per year.
- The car’s safety record and reliability. What does Consumer Reports say? What do mechanics say? Have you asked?
- How much will your insurance rates increase? How much if the teen gets a speeding ticket? How about a fender-bender?
- How easy is it to change this vehicles tires in case of a flat? Can the your teenager learn this skill?
- Does your teenager understand what the warning lights are and what to do if they come on?
- Will you provide a cell phone to your teenager in case of an emergency while on the road? I plan to, so there’s yet another expense.
Don’t be forced into making a poor financial decision by your need to make sure your kid keep up with the Joneses. That is a horrible example to set. Buying a car isn’t a one time expense. The spending associated with owning and operating a vehicle never ends.
I hope I can instill these principles in my children. With two of them just around the corner from driving age, I don’t have much time.
On the web:
Edmunds “The True Cost to Own”
[tags]life, car, teenager, budget, teenage driver[/tags]