Help Your Teen Find the Right Car

Posted by Lone Star CU on 09/09/2020

September blog header graphicDo you remember your first car? Whether a Jaguar or a junker, there’s something special about the first time you sit behind the wheel of a car that’s all yours. If your teen is a newly minted licensed driver, it’s inevitable they’ll ask to stop borrowing the family minivan and get some wheels of their own.

It's essential to consider safety, affordability, and reliability when purchasing a teen's first car, according to William Van Tassel, Ph.D., manager of driver training programs for the American Automobile Association (AAA)

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

If you’re thinking about purchasing a car for your teen, or chipping in some money for a down payment, we’re here to help! Learn about safety, how to price shop, and what to do if your sales associate is a bit too pushy. Ready to buy? Check out our First Time Auto Loan program.

Look for safety

Choose a safe vehicle, using information offered by websites such as AAA, the, 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

It’s very easy to get emotionally invested in a car. You see it across the lot, test drive it … you can envision yourself singing along to the radio on a road trip. Buying a car should not be an emotional decision; rather parents can help their teens calmly and rationally choose a car that suits their needs.

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.

If your teen is ready to take the wheel in their own car, Lone Star Credit Union offers First Time Auto Loans with up to 85% financing on the drive-out price of your new vehicle with a maximum loan term of 60 months. Plus, after 12 months of on-time payments, you may be eligible for a better rate on your auto loan, because we believe in rewarding good payment history. Apply today or become a Member to take advantage of our great rates!

Topics: advice for members