first-car

Should You Help Your Teen Buy Their First Car?

The thing about “learning an expensive lesson” is that you could learn the same lesson for cheap if someone would have just told you what was up. So the question is not so much “should you help your teenager buy their first car?” as “to what extent should you help your teenager buy their first car?”

Consider for a second what will happen if you don’t help your teenager at all in the buying process. More teenagers than not are going to go out and buy a car that looks great, and runs like a busted wind-up toy. They’ll learn a thing or two about shopping around during driver’s ed, kicking the tires before you buy, but you’re going to learn their route to work like the back of your hand because you now have to drive them everywhere since their car broke down.

At the very least, offering some advice to get them through the buying process is a must. If you leave them to their own devices, most teens will not make a smart buying decision, and that will become a problem that will quickly become your problem. By making sure that their first car is at least not a lemon, you’ll help them to become more independent, and this means more free time in your day. If you can visit the lot with them and look over any car they’re thinking of buying, all the better.

In terms of helping your teen financially, this really comes down to how comfortable you are doing that in your household, and what you can afford. For many working class parents, the idea of putting any money your teen’s way is laughable. On the other hand, parents who have a little bit of money to throw around might not think twice about buying a teen a car as a graduation gift, or offering to go halfway, meeting their teen dollar for dollar.

Another option that many parents take: Making an interest-free loan to their teen.

A great way to teach a teen the importance of hard work and responsibility is to buy a used car for them outright, but to have them pay you back in monthly installments. If your teen’s credit is good enough that they can get a loan for the car from the bank without a cosigner, then you should be asking them for money, not the other way around. Likewise your teen is unlikely to have the $3,000 on hand to buy a used car before somebody else makes the purchase. By buying the car, and letting your teen pay the money back to you, you will be able to help them out while also teaching them some important lessons about being a grownup.

Put simply: You’re asking for trouble if you send your kid out there on their own and hope for the best. But you might want to consider what you’re teaching your teen about work and responsibility and finances if you buy them their first car as a gift. Does your family have a safety net of wealth and security, or is your kid going to have to work for a living? You need to make sure that your teen is able to get through life with the resources that they have available to them, and if one of those resources is not an endless supply of money, then a lesson in the value of a dollar will be a lot more valuable to them than a free car.

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