Purchasing a first vehicle is a major milestone in every teenager’s life. Cars and driving independently represents freedom, as well as trust between parents and their kids. Unfortunately, getting a car also means spending some money.
Outside of buying a house, buying a vehicle is one of the most expensive purchases a person can make. That cost can be doubly hard on individuals who do not have steady income or large savings - such as teenagers.
Luckily there are strategies teens can use to make the process of obtaining their first car a little easier.
Saving up
Just as with any big purchase, saving for a first car is key. The first step is identifying what kind of car your teen is looking for, which will establish the amount she needs to come up with. Next comes the hard part: Not spending money on other things.
Holding onto money can be difficult for anyone, but is especially difficult for teenagers. If it seems like there’s always a hot new gadget or trendy new clothing style hitting the market aimed at young people, it’s probably because there is. However, learning to keep those savings safely set aside instead of dipping in to pay for impulse buys is an important part of growing up, and a skill teens can use the rest of their lives.
Of course, teens need money in order to save it. Getting a part-time job is typically the best way to do this. Once some steady income is being generated, teens can get to the business of saving. Open up a savings account at a local bank or credit union where your teen can deposit a certain amount of each paycheck.
Shopping smart
Because used vehicles are typically much cheaper than brand-new ones, it’s a good idea to help your teen look for a pre-owned car.
Beyond bargain-hunting for the car itself, it’s also essential for your teen to fully understand what she’s getting. Make sure she does her research before making that final decision. What kind of condition is the vehicle in? What kind of gas mileage does it get? Are there parts that need repair or replacement? Your teen should definitely get the answers to these types of questions before she buys.
Taking other expenses into account
Unfortunately, as you know, the cost of buying a car doesn’t stop at the vehicle purchase itself. Things like gas, maintenance and insurance can add up quickly, making it necessary to take extra expenses into account when saving up. Work with your teen to outline these costs. Get a good projection of how much money she will need to put toward the car every month, so that she can be certain she will be able to cover those expenses.
Your experience as a parent and car owner can prove invaluable throughout this process. Whether your teen is funding her first car all by herself or is getting some much-appreciated help from mom and dad, this is a great way to teach her economic fundamentals, including: saving, bargain-hunting and planning on a larger scale.