When planning on giving your teen their first car, it can be extremely difficult. Between your teen going out into the real world by themselves for the first time and the expense of a car, it can be overwhelming. With the car, insurance, gas and the repairs that no one sees coming, all of that can be especially frightening to a parent that is doing this for the first time. But never fear, because here are some tips that will help you save money when your teen gets their first car.
1. Save on the Car Itself
No matter how long you’ve been saving for this, car shopping can still be a slap in the
face with new car sticker prices. You can forget how expensive a car actually is. But one of the best ways to save money on a car is to get your teen a mechanically sound pre-owned car. That way, you know it will be cheaper than a new car. This will also give your teen incentive to start saving for a cool new car all by themselves, which is a lesson that is hard to teach, but among the most important in life.
2. Consider Your Insurance Options
In some cases, it may be less expensive to add your teen onto your insurance rather than having them take out a whole new policy just for themselves. However, your best option may even be to take out a new policy with a new insurance provider either for a lower family rate or for a lower individual rate for your teen. No matter what, you’re going to have to shop around and do your research to save money on your teen’s car insurance while also making sure that they get the coverage they deserve.
It is also important to keep a couple of car insurance tips in mind when buying the car and pricing the new policy for your teen. For instance, you should know that teenage boys are more expensive to insure than teenage girls. You should also know that red cars typically cost more to insure than other colors because if your teen gets into an accident, it’s extremely hard to match red paints due to how much they fade. Red cars are also more likely to be stopped by police, so that is a conversation that you want to have with your child when you go car shopping and something else to consider when talking about insurance.
3. Talk to Your Teen and Come to an Arrangement
Nothing teaches financial responsibility quite like getting your own car. Not only do you have to budget for the car payments themselves, but you also have to budget for insurance, gas, and miscellaneous repairs and maintenance that might come up. Because of all these expenses and different means of paying for the car, this is a good time to talk to your teen and come to a payment agreement. This not only takes some of the fiscal responsibility off of you, but it teaches that to your child as well. Maybe you pay for the insurance and keep a maintenance fund but they pay for the car itself and the gas. No matter what decision you both come to, make sure it works for both of you, and don’t be afraid to even write up a contract!
Giving your teen that first car can be so hard for a parent, but these steps should be here to at least make it a little bit less expensive. This is the perfect way to teach your teenager how to be financially responsible while also giving them the freedom that they have been waiting for years to have.