A reasonable approach to buying your teen’s first car
“Frugal Dad” has some great advice for buying your teen’s first vehicle, and it starts with this: Don’t buy your kid a new car.
“Some out there hock their own financial futures to put their prince or princess in a brand new car, and pay for it long into their college years,” Frugal Dad writes. “Not only is this harmful to the parents’ financial plan, it sends a bad message to teenagers.” Need we say more about encouraging a sense of entitlement?
Which brings us to his second point: Set up a savings plan that allows you to match the child’s contribution. He adds, “If your kids are as enterprising as mine, you may want to put a limit on this. Else they could save $20,000 of their own money and expect a new Hummer when they turn 16.”
When it’s time to buy that moderately priced used vehicle, check safety ratings and have a mechanic examine the car. Frugal Dad also recommends using CARFAX to review the history of the particular vehicle you’re considering. Also, we’ll add, find out how much the car insurance will cost.
Decide how to share the many expenses of car ownership and set a budget. Emphasize fuel conservation. “If you give a teenager $50 a month for gas, they better not cruise around after school burning up fuel or they will be catching the bus the last week of the month,” Frugal Dad says. “This will subtly begin to instill in them the value of budgeting.”
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