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Car Buying Tips for Teens


Many teens have dreamed about buying their first car. They know exactly what it is going to look like; model, color, extras.  But there is so much more to think about when making this very important purchase.  Safety, insurance, gas and maintenance costs are just a few of the considerations to be made.  Before heading out to the dealerships or scouring the classifieds looking for that dream vehicle, take the time and do research to find the perfect vehicle.

  • Insurance - The high rates for covering a teenage driver can be a major barrier in owning a car. Call around for insurance rates from many companies before making your purchase.  Consider higher deductibles, $500 or $1,000, to reduce the premium. Make sure to inquire about good student, multiple car or driver education discounts.  In addition, some insurance companies offer lower rates for participating in “monitoring programs” where a camera is installed in the car which can provide video and audio if triggered by aggressive driving.
  • Maintenance - This is an expense that is often overlooked when shopping for a new car.  Foreign vehicles, for example, usually have higher maintenance costs then domestic vehicles.  Consider oil changes, tire replacement, gasoline and other routine maintenance charges in your decision.  A good practice would be to add up your annual cost for these items, divide that number by twelve and set aside that amount monthly in a special savings account reserved for auto expenses.  That way, when the oil change is due, you have the money in the account to cover it.
  • New or Used - While many young drivers are attracted to new cars, with all the bells and whistles, cost may prevent them in getting want they really want. Make a list of all the features that are a “must have”, for example, safety features or size. Then consider if a late model used car, costing thousands of dollars less than a new vehicle, would meet your needs.  The biggest cost in owning a new car is depreciation, with some new cars dropping in value by as much as 20% in the first year on the road.  Check Consumer Reports for information on a model’s value and auto magazines for technical and performance information.  If you decide to purchase a used vehicle, check the vehicle history by pulling a CarFax report, as well as have a third party mechanic thoroughly inspect the car.
  • Safety - According to the Insurance Institute for Highway Safety (IIHS), teens are four times more likely to be involved in an accident then older drivers. It is important to research crash ratings of the vehicle you are considering. The IIHS recommends choosing a midsize car with updated safety features and avoiding sports cars or high-performance vehicles that encourage speeding.  The teen should feel comfortable driving the car, be able to reach all the features with ease, and should be able to handle the car under adverse conditions.
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