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Purchasing A Car For A Teen – Help!

June 22, 2010 · 30 comments

in Parenting, Personal Finance

My oldest son turned 16 recently.  He doesn’t have his driver’s license yet since drivers education is pretty time consuming here in Michigan.   By the way, it is also expensive.  Back when I learned to drive, it was pretty much free through the local school district.  In Michigan, you now have to pay a private company for everything, including the road test.  Yet another unplanned expense!

Will this car be in my driveway soon??

Anyway, since my son was so busy with school and sports, he did not get all his drivers education done before his 16th birthday.  But, it is summer now, and he is finishing up classes as we speak, and I am typing at the local library.

In the not-too-distant future, my son will hopefully be licensed to drive, and will be looking at used cars.  We told him we would match whatever he put down toward buying a car.  So, he will soon be scouring the ads for an inexpensive used car.

This is what has me worried!  Whenever I have bought a car for the family, I have bought the safest car I could find.   So what I am nervous about is sending my inexperienced teen driver out into the driving world with a cheap car.  I have nothing against older cars, but from what I am seeing in the Classifieds, many of these cars probably do not have all the safety features that newer cars have.   Sure, we could pay more and get him a nicer, and most likely safer car.  But would that be teaching the right lesson?  Am I being too overprotective?   Do I need counseling?  Teens everywhere drive older cars, but it just makes me nervous.

The way I see it, my options are as follows:

  1. Match the money he has saved and get a cheap car.
  2. Loan him money and get him a slightly more expensive car.  However, the payback would probably be around the year 2025
  3. Just suck it up and buy a more expensive car that has all the safety features I want
  4. No car at all, he borrows mine when it is convenient for me

I recognize driving a car is definitely a privilege and not a right.  However, I will admit that if he were driving, it would make my life a lot easier too.

So, what do you think??  Please feel free to share your thoughts and opinions!!  I have never been through this before, so I need all the advice I can get.

(By the way, if anyone has an inexpensive car for sale that has airbags everywhere, let me know.)

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{ 27 comments… read them below or add one }

Diane June 22, 2010 at 8:36 am

Everyday Tips,

We recently bought a used car for our teens to share. The whole decision comes down to what you feel comfortable with. But, there are a couple of things that we learned along the way that you should consider when making your decision.

1. We went for almost a year with kids borrowing Moms car (or dads) when it is convenient. The lesson I learned is that it is never convenient. Nothing worse than walking out to the driveway to go to the store, pick up a kid, etc. and realizing there is no car. If you go with this option you have to realize that he won’t be driving much – especially with your crazy schedule.

2. If your child isn’t driving, someone elses child will be. We can’t avoid our kids ever driving with a bad driver but many of their friends will probably have older cars (unless you conduct a 5 point safety inspection before giving them permission to ride with anyone:) )

3. If your child puts money towards the car, it becomes their car vs a 3rd family car. Depending on how your kids are spaced – that means each child having their own car. This is nice if the first takes the car to college but can also get expensive which brings me to the next point….

4. Before you make any decision on a car, talk to your insurance agent. Most agents will tell you to buy a car that you don’t need a loan on and just put PLPD on it (in Michigan we are a no fault state – PLPD is the basic insurance everyone must have – but this offers no collision – no matter whose fault the accident is!). We recently bought a 97 Escort – collision on it for my almost 17 year old honor student son with no tickets, accidents, etc (knock on wood) was going to be an extra $1,000 a year (in addition to the almost $1,000 to put him on the insurance as the primary driver of a 13 year old car) and if the car was totaled the insurance company would have paid us between $1,800-2,500. You have to figure the cost of insurance in with the price of the car to get a true picture of your financial commitment.

We learned when buying a new car you have to be patient, persistent and a little bit lucky. I am sure whatever you decide will be the best decision for your family (and if not you still have 2 kids to get it right with:) ) Good luck!

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Kris June 22, 2010 at 8:43 am

Diane, what great information! I knew insurance was a tricky situation, but I didn’t think of calling my agent before I get the car.

You also raise the good point of my son riding in other kid’s cars that I can’t scrutinize! You raised so many good points.

I also thought about the family car vs. ‘his’ car. It is hard to decide what to do. My daughter is 2 years behind, which is when he would go off to college. He has this crazy idea that he will take a car to college. I informed him that where I went to school, they didn’t allow freshmen to have cars. But I have no idea what the rules are at other schools.

What I need is a giant ball of bubble wrap that can drive around the city. I would probably feel safe with that.

Congrats to your son for being ticket free. I know many teenage boys that have tickets.

Thanks so much for your informative comment!!

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Diane June 22, 2010 at 9:05 am

I like the idea of a giant ball of bubble wrap. If you invented a bubble wrap car cover you would be rich – every parent would want one. You could offer several different styles that could be easily adapted to fit similar car types (i.e. 2 door coupe, 4 door sedan, SUV, etc.) – think slipcover for a car. It would need to be see through, with “doors” that could easily let people get in and out of the car – I think you are on to something.

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Kris June 22, 2010 at 9:22 am

I will start on this project right away. I have a ton of bubble wrap since I also sell books on the side, so I should have my prototype done by noon.

Expect a custom-fitted bubble wrap cover in your driveway by COB today.

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Young Mogul June 22, 2010 at 10:28 am

I don’t have kids, so my advice may be worth nothing, but…

I work with teens and the idea of them driving makes me SOOO nervous for their own safety. I just had a student in my program involved in a SERIOUS car accident that was being driven by another teen (not trying to make you more nervous, I swear).

But…I have never understood the notion of a teen being entitled to a car for his/her 16th b-day. I didn’t get a car until my early 20s when I could pay for it completely on my own and was sure I had enough money to pay the note if I lost a job.

My personal opinion is 16 year olds are not responsible enough to get a car and it gives them too much freedom and provides more issues for the parent. Another example…I am Director of a college prep program for high school students…A 16 years was allowed to drive himself to our 6 week residential program, without my knowledge. While he told us he was going to get toilet tissue from his car, he decided the car was too far from the curb (it was because he doesn’t know how to park) and decided to move the car. He did not clear the car in front and hit it. We were outside after 10pm waiting for the police because campus security insisted on filing a police report. Because it was a non-emergency, we waited over an hour for police who never came. The parent had to incurr the cost of the accident..luckily it was just a busted tail light.

Most colleges don’t allow freshmen to have cars on campus anyway. So, I see no reason why teens need a car before their sophomore year of college. This would give your son years to save for a newer and safer car, while you still match his money.

My two cents…from someone with no kids, but am worried everyday about other people’s kids in my program that I am very protective of.

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Kris June 22, 2010 at 12:15 pm

Young Mogul – thanks for sharing. It is very hard to know what is right. I am not saying he is entitled to a car for his 16th birthday by any means. But, it is something we need to consider and discuss. I did not get a car for my 16th birthday either. But following up to Diane’s point, would I rather he be riding with kids I trust less, or driving his own car? The truth is, many kids do have cars when they are 16 nowadays, so teens will be on the road no matter what.

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Budgeting in the Fun Stuff June 22, 2010 at 10:34 am

LOL…moms…

My first car was a piece of crap 97 Mazda Protoge that leaked a quart of oil every 2 weeks and stalled at every stop even though it was an automatic…oh, and no a/c in Houston, TX…and this is the car my parents “gifted” me my first year of college so I’d visit more. I hate driving and I really hated driving that car.

I’d suggest inexpensive used cars with model years after 2000. They’d all have airbags.

I am personally a huge fan of the Chevy Cavalier or the Hyundai Accent since they’re inexpensive, make good gas mileage, but are known to last. Either one used is $2500-$6000 depending on the year and mileage. My little sister is using the 2004 Chevy Cavalier my parents gave her with more than 130,000 miles and it is still going strong with her long trips. The liability insurance in TX is about $960 a year for a 19 year old girl with no tickets or accidents.

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Kris June 22, 2010 at 12:17 pm

BFS – My first car was not a thing of beauty either. I actually had a car where the passenger door would just whip open if I didn’t close it just right. Fun!

I will look into the cars you mentioned, although I don’t think I can go foreign up here in Detroit! 🙂

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Vicky June 22, 2010 at 10:45 am

You’re scaring me! I have twins that will be in drivers training in 4 months. 2 cars, 2 more teens to add to insurance…

Thanks for the info though. I think I’ll print it.

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Kris June 22, 2010 at 12:19 pm

Vicky – For what it is worth, they do require the kids drive with their parents a heck of a lot more than we ever did. What worries me most is all the distracted drivers out there. People just don’t pay attention enough when driving anymore, and my teen drivers just don’t have the experience to anticipate some of the dumb stuff people do while driving.

Thanks for commenting!

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Sandy L June 22, 2010 at 2:03 pm

I got into 2 accidents my first year driving. I consider myself a pretty good driver..knock on wood, I’ve never been in an accident that was my fault. No matter how good your kid is, their defensive driving skills don’t get honed for about a year. Even though the accidents weren’t my fault, they could have been prevented if I could’ve better anticipated what the drivers on the road would do.

So, don’t get something too nice because it’s going to get dinged. I would also say safety is important, but cars have been pretty safe for a long time (unless you get a convertible or a really really old car).

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Kris June 22, 2010 at 3:21 pm

Sandy, You are totally right about how it takes awhile to get your defensive driving skills developed. And, I think people drive worse than ever now.

Thanks for visiting!

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Car Negotiation Coach June 22, 2010 at 4:13 pm

Hey Kris, welcome to Yakezie!.

I was lucky enough to have my parents give me their old honda accord when I turned 16….fortunately I appreciated the gesture and it did not keep me from developing into a frugal and finanically sound adult. If you are able to do the same, I suggest it and it will make your life easier. And I wouldn’t worry too much about safety. Teens are going to bang up a car a little bit, but hopefully nothing serious. Get something cheap that you can walk away from in a few years.

I usually try not to post links in comments, but I did do a post about this a month ago, so in case you’re interested: http://blog.findthebestcarprice.com/car-buying-tips/advice-for-first-time-car-buyers/

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Kris June 22, 2010 at 4:23 pm

Hey CNC – I checked out your post and it was helpful.

It is great that you appreciated that first car and you were able to keep your frugal ways!

It would make my life easier in about 100 different ways if my son drove. It is such a difficult decision, that is for sure.

Thanks for the welcome, and come anytime!

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Money Smarts June 22, 2010 at 4:21 pm

I don’t believe it’s a right for a kid to have a car when they turn 16. I think for far too many getting things like a car becomes a right without them having to work for it. In this situation, however you said that the child was helping to pay for it, so to me that’s different.

I didn’t get a car until I was in my 20’s, and that car was a 12+ year old boat of a station wagon i saved up for and paid $1500 for. For me it was the perfect decision -and I loved that car – and nothing short of a nuclear blast would have caused a dent on that car.. But since the car was paid for with cash – and because i didn’t get a car until I absolutely needed one, we saved a LOT of money.

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Kris June 22, 2010 at 4:27 pm

Money Smarts – is your station wagon for sale? 🙂

Yes, my son would be paying toward the car, and he will be responsible for maintenance, if we go forward with it. He doesn’t care what kind of car it is. He actually loves my Taurus X, which really is not an attractive car. But, I love how functional it is.

I will write an update when I make my decision. I really appreciate all the comments!

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Money Reasons June 22, 2010 at 6:47 pm

I so dread the day when my son it 16… He’s growing too fast already!

I think I would buy my son a small truck. It would come in handy when some day he goes off to college, plus it’s just fun all the way around! If you don’t already have one in your family, it could even be useful for the entire family too.

Perhaps as encouragement, you could offer to pay a bit more for an approved used car model that you think would be safer?

Oh one thing to remember is even if it’s a safe car, it’s still dangerous! I remember going car surfing on the top of my buddy’s safe car ceiling as we drove in an allotment going 35 to 40 mph (I wasn’t dumb enough to drive on a major road). It was fun back then, but if he had a nicer cooler car, I’m sure we wouldn’t have done that!

Good luck, that’s a hard decision!

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Kris June 22, 2010 at 7:47 pm

Money Reasons – I know you have probably heard this a million times, but the years just whip on by.

The truck is a good idea, and I have often lamented we don’t have a vehicle to haul things around in. I am sick of paying for delivery! My only concern is a bunch of teenagers riding around in the back being crazy. See, I think I do need counseling.

Car surfing? You are every mother’s nightmare! 🙂

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Money Reasons June 23, 2010 at 6:41 pm

Luckily, Mom never found out 🙂

Yeah, I can see what you mean about the truck and kids riding in the back…

My buddy at work got his kids a used honda civic and a used honda accord. But like you said, being in Michigan… that wouldn’t go over so well!

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Suba @ Wealth Informatics June 22, 2010 at 7:20 pm

I am not even a mom yet but I will be first in line to reserve that bubble wrap 🙂

1) About the car – I don’t have any experience buying a car specifically for a teen. But I did look a lot for a cheap safe car for my sister. I liked the Honda (Civic/Toyota) or Toyota (Corolla/Camry) with airbags and curtains. All of them were <$5000 for a 7-8 yr old ~120k. But I think you don't want to buy foreign cars? I also read large cars/SUVs are better for teens. Don't know much about that. If it helps this one has statistics in crash ratings http://www.safercar.gov/staticfiles/DOT/safercar/pdf/BASC2009.pdf
I totally agree with Diane on talking to your insurance agent before you buy the car as the difference in premium for different cars can vary a lot.

2) Other than the standard teen driver Ed and defensive driving course, may be you could consider a car control clinic. They go beyond the standard education and specifically train for panic/emergency situations like driving in wet road, panic braking and even a "simulated" DUI. Both the teen and a parent are supposed to attend this 4-8 hr course. The course is designed to make them appreciate the rules because they understand what will happen if they don't wear seat belts or text while driving. Making then teens appreciate the need for safe and defensive driving is an excellent way to get them on the road. Just a thought in case you didn't know.
If you are interested these are some of the examples (don't know where you live to find an exact program) —

http://www.driversedge.org/
http://www.streetsurvival.org/index.php
http://www.carcontrol.com/
http://www.toyotadrivingexpectations.com/EIM.TMS2372.Web/Home/Home.aspx

Just my 2c.

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Kris June 22, 2010 at 7:44 pm

Suba – Your comment went to my SPAM folder- probably because you were helpful and had those links!

Thank you so much for all that information. I have already read a lot of it, I didn’t even know about those extra classes. My son does know that if he uses his phone on the road at all, his driving privileges will be gone.

If we could find a safe car under 5k, I would be have a major celebration. I do have a hard time buying foreign, so I am mostly looking for used American cars.

Again, thanks!!! It was very thoughtful for you to copy in all those websites.

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finallygetttingtoeven.com June 23, 2010 at 7:35 pm

Ah you are entering into the “I am forever going to be sleeping with one eye open for the rest of my life now’ phase….lucky you.

I think you could put him in a tank and you will still be worrying about whether you made the right choice and if there were a BIGGER tank coming down the road at him from the opposite direction.

And yes, I do have a great vehicle for sale if you are interested… We are actually leaving here in a few hours to drive 10 HOURS to go get hubby’s new (well, not new, but new to him) SUV…which leaves behind a great 1999 Mercury Mountaineer that is in pristine condition and I will not allow him to trade in and take a beating on…(just as a little added incentive the last dealers were drooling over our little vehicle, but I said NO WAY!) so if you want more info–email me @ finallygettingtoeven@gmail.com (and that goes for anyone else reading this). I am in Indiana so I don’t know if that is too far for you but we can converse if interested…

Anyway, great site you have here I just followed you over from a comment you left on my own site. I think I will go look around now. Thanks!

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Kris June 23, 2010 at 8:05 pm

Hello Finally! Thanks for mentioning the Mountaineer. I will have to think about that! I just don’t know if I am ready to buy anything just yet, and I am assuming you probably want to unload it as soon as possible.

Thank you for your kind words! And, thanks for reading!

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Financial Samurai June 27, 2010 at 7:32 am

I’d get him the biggest, safest, cheapest junker you can find!

This is the GOLDEN opportunity to make sure he does not fook around the final two years of high school!

“Son, I will buy you car X if you get straight A’s to give yourself the best chance to go to Harvard. Anything less, you will get a bicycle and like it!” Something like that.

My first car was $1,900, and the clutch blew out 2 weeks later.

Use the car as a carrot!

Best,

Sam

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Kris June 27, 2010 at 10:01 am

Samurai – Good idea as using it as incentive. I just keep going back and forth over what to do, I can now add this to the list of considerations.

The more I think about it, the better it sounds. He does well in school, but he could definitely put in more effort. I had been using his xbox for bribery, but a car is a much better ‘carrot’. Hmm…

Thanks!

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Financial Samurai June 29, 2010 at 9:48 pm

Kris – A car is the BIGGEST baddest carrot for a teenage boy! I would do ANYTHING to get a car from my parents if I was in HS.

Use your opportunity wisely!

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Kris June 29, 2010 at 10:15 pm

Good advice wise Samurai. I have a lot to think about for sure. His driver’s test is this Saturday, so we will see if he will even be qualified to drive anytime soon! 🙂

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