Your child stands before you with a freshly printed driver's license, and you promised to buy him or her a car upon successful completion of the road test. Your mind is filled with a mix of pride and fear, as you envision your teen driver responsibly picking up groceries from the store and going for a joyride with a car full of other teens. Despite these reservations, you made a promise and intend to keep it.
But where do you start? Sure, you could take your recently licensed driver to a dealership with a set budget and let your teen make the choice, but do you really want a two-door coupe with tons of horsepower pulling out of your driveway on a Friday night?
Most parents are divided on the issue of whether it's even a good idea to give teens their own cars. However, doing so presents an opportunity to teach your new driver about responsibility, auto loans and managing money in his or her checking account. If you're ready to get your teen on the road, consider the following:
Used cars usually make more sense
If given the choice, most consumers would choose a new car compared to a used vehicle. When it comes to your teen, that decision is ultimately yours given that you're the one shelling out money. Despite the benefits of new cars, which can include fewer initial maintenance costs and that coveted new car smell, younger drivers are more likely to be involved in traffic accidents. Put your investment toward something affordable but functional. Certified pre-owned vehicles come with warranties to help you ensure your new driver doesn't get a lemon.
Search for a safe, dependable vehicle
With a car full of friends and a blasting radio, it can be easy for teen drivers to be distracted and become involved in a fender bender. To prepare for the possibility of an accident, check safety ratings for any car you and your teen are considering.
Split the financial burden
Rather than footing the entire bill for the car and ongoing expenses, you can encourage your new driver to get a job to help you with the vehicle costs. Open a savings account for your teen so he or she can put away some money to help with the down payment. Once the vehicle has been purchased, share the costs for auto insurance, loan payments, gas and maintenance.
For more information about smart ways to manage your finances, contact Landmark Bank.
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