The process of buying a car for their teenager likely brings mixed emotions of excitement and worry for parents. Here are a few things parents should keep in mind before deciding to gift their teenager a car.
Things to Consider Before Buying the Car
First, parents should seriously consider if their teen is ready for the responsibility of owning their own car. Driving is a skill that requires time to master, and some teens may need more practice driving with their parents in the car to guide them before they are allowed to drive solo in their own vehicle.
While parents have traditionally purchased used cars for teenagers, it’s worth considering the advantages of a new car. Standard safety features on newer vehicles have advanced significantly in the past few years. Additional safety elements may even lead to an insurance discount for teen drivers. If a new car isn’t an option, parents can opt for a used vehicle that has rated well on crashworthiness tests.
Finally, parents should do some research to determine the financial impacts of buying a car for their teenager. These considerations range from the additional costs of adding a new driver and vehicle to an insurance policy to the actual payment plans and financing options for the vehicle.
Tips for Choosing the Right Vehicle
Once parents have decided to purchase a car for their teenager, they will begin the actual search for a vehicle. Keeping safety, car size, and financing in mind can help parents make the best decision.
Parents should keep safety features at the forefront of their search. Some safety functions to look for are automatic emergency braking, electronic stability control, forward collision warning, and rear cameras. Cars with Bluetooth connectivity and other hands-free options encourage teens to keep their hands on the wheel and off their phone.
Midsize cars are easiest for inexperienced drivers to handle. They also have less seating which means a teenager won’t have too many passengers in the car, a factor that can lead to more accidents. Though teenagers may want a trendy car, parents should avoid buying sporty or fast-accelerating vehicles that might encourage racing or reckless driving.
Financing Options
When it comes to financing a car for their teenager, there are a few options buyers can keep in mind. Obtaining pre-approval, choosing between short-term and long-term car loans, and making a down payment are all financing factors that parents may consider.
Buyers may choose to research and commit to a financing option before beginning their search for a vehicle. This ensures that they are staying within their budget and are choosing the best financing terms available rather than just choosing what is offered at the time of sale.
Long-term and short-term car loans have different features that may make one option more suitable for a buyer than the other. Short-term car loans add up to less interest overall, while long-term loans offer smaller monthly payments.
Parents may consider making a down payment at the time of purchase. This lowers monthly payments and sometimes comes with more advantageous loan terms.
What to Do After Buying the Vehicle
Once a car is purchased, there are a few important steps to take before getting it on the road.
Parents should ensure the new vehicle by adding to an existing family insurance policy or starting a new one for the car. Liability insurance is legally required for all vehicles, while accident and theft insurance are only required if the buyer took out a loan to purchase the car. Since teenagers are inexperienced drivers, it’s worth obtaining this additional coverage even if it’s not legally necessary.
Cars must be registered with the state using the bill of sale. This document will prove ownership of the car and will be used to determine the sales tax owed to the state. If parents opted for a used car, they must take the additional step of completing a title transfer. This can be done at the DMV.
Before teenagers begin using their car regularly, their parents should help them determine a maintenance schedule for oil changes and other routine procedures. This initial plan will ensure that these important tasks aren’t neglected, and that the teenager understands the responsibilities of caring for a car.