Everyone remembers their first car. Loving the freedom of the open road, getting your driver’s license, feeling in control, being behind the wheel by yourself for the first time. It’s an exciting feeling for the teen in your life, but how much should you spend on a car for your inexperienced driver? Here are some reasons to think twice before going out and buying your 16-year-old a new car:
1. New cars depreciate quickly. Buying a used car could be a better option. According to Dave Ramsey, most vehicles lose about 60% of their value in the first four years. Buying a used car is easier on your budget and will help save for more important things (i.e. college) for the future. Also, the type of car you purchase will have a direct impact on the cost of insurance. That cool red Trans-Am may not net the best rates from the insurance company. Consider that blue Civic. May not be the hippest car around, but will save a bundle in insurance and serves the purpose of getting from point A to point B.
2. Teach responsibility and work ethic by having the teen pay for or help pay for the car, the insurance, or the gas. Or a combination of all three. Because the cost of insuring teens is so high, it is a big motivator for your teens to understand the costs along with ways to help reduce the cost. Maintaining a high GPA is an example of a way to reduce their insurance costs. When your teen has personally invested in their own vehicle, they will be more likely to take better care of it. This also teaches teens about the importance of budgeting for high-ticket items like an automobile.
3. Teens are at a much higher rate for car crashes. In 2008, about 3,500 teens in the United States aged 15–19 were killed and more than 350,000 were treated in emergency departments for injuries suffered in motor-vehicle crashes. Young people ages 15-24 represent only 14% of the U.S. population, but they account for 30% ($19 billion) of the total costs of motor vehicle injuries among males and 28% ($7 billion) of the total costs of motor vehicle injuries among females (Centers for Disease Control and Prevention). Even minor accidents can cause insurance rates to skyrocket, so make sure your teen practices safe driving.
Whichever car you purchase, make sure it’s a safe one. A properly inspected used car can still be very safe, just make sure that the airbags and seatbelts still work. Have a used car inspected by a reputable dealer or mechanic to make sure it is in proper working order.
Once you’ve found “the” car, look for discounts on car insurance and teach your teen ways to save fuel costs. And above all, remind your teens to keep their eyes on the road and safe travels!