Help Your Teen Find the Right Car

Van Tassel says teens need to learn what it costs to drive. Parents can start the process by telling teens the cost of gasoline, insurance, and repairs as they pay the bills. Ask the teen to help care for the vehicle they eventually will drive by washing it, checking fluid levels, and keeping the maintenance log. "Start these talks half a year, at least, before a teen is actually eligible for a learner's permit," Van Tassel says. Set rules for the teen's use of the family vehicle, following your state driver’s license policies, which include when the teen can drive and who can ride along.

Look for safety

Choose a safe vehicle, using information offered by websites such as AAA, the SaferCar.gov, and the Insurance Institute for Highway Safety. Ideally, the vehicle should have these three safety features:

• Air bags, including side impact air bags, which can reduce injuries in a crash.
• Antilock braking systems, which can provide directional control in emergency braking.
• Electronic stability control (ESC), which can help reduce rollovers.

Understand the cost

The combined cost of owning and operating a car is another lesson to share with teens. The 2019 edition of AAA's Your Driving Costs report puts the average annual cost of driving a sedan 15,000 miles a year at 61.88 cents a mile—$9,282 a year. Put that figure into perspective for teens by converting the vehicle's cost into hours worked. To get an approximate figure, take the number of miles the teen will drive each year, multiply it by 62 cents a mile, and divide the result by the teen's hourly wage.

Make an agreement

If parents have a financial stake in the teen's car—a down payment, loan payments, insurance, or other costs—then they can consider creating a written agreement. The agreement should cover:

• Who pays for specific types of expenses, such as insurance or repairs.
• How the teen's behavior affects driving privileges.
• What the consequences will be if the teen fails to live up to the agreement.

Go shopping

Teens also need to learn about dealer practices and negotiating the best price. Parents can help by sharing their experiences and going with teens as they shop. Help your teen get answers to these questions:

• Is the dealer reliable? Check for complaints with the state attorney general's office or the Better Business Bureau. Some credit unions share a "preferred dealers" list with members; check with your credit union.
• Is the vehicle in good shape? Get the vehicle inspected by a good mechanic. Consider looking for used cars that are "certified" as meeting the manufacturer's resale standards.
• What is the bottom line? Remember to add sales tax, title fees, and license fees to the sticker price.

Avoid the rush

Many credit union lenders have seen teens rush into "deals" only to find they paid too much, agreed to a loan at exorbitant interest rates, lacked a clear title, or bought a car with serious defects. Parents and teens alike can benefit from taking time to share stories, do their research, and consider what owning a car will cost over time. It saves a lot of headaches in the long run.