Auto Insurance: Should I Buy a Car for My Teen?

Should you buy your newly licensed teen driver a car of his or her very own? There are so many variables to this question; let's go over a few:

    • How responsible is your teen? This is not only a question of his/her responsibility level but also how they will react when they have others in the car with them. Teens, no matter how responsible on their own, can be prone to making some decisions lacking in substance when peers are with them in a vehicle. We have all read the stories and statistics regarding teen accidents.

    • Are both parents in harmony with whether or not to buy their teens a car, help them buy a car or allow them to buy their own car? One parent might be inclined to go forward while the other is very reluctant. Once the teen is aware of that division, if there is one, it can lead to a lot of family discord. It is important the parents be on the same page and then stick to their decision, no matter how the teen might react. In addition, other family members need to know of your decision so they can be supportive.

    • What will adding your teen to your insurance to do your rates? Careful research with your agent is essential. Many insurance companies give you a credit for "multiple" vehicles but the fact remains that your teen's age and gender, whether you want to admit it or not, is going to be a significant factor.

    • How are your teen's grades? This is a paramount question in two regards. First, for the parents it is a guideline to use for your teen to follow that his/her grades must continue to remain where they are or to get better. In addition to this, auto insurance companies usually want to verify this information and it is used in what the rate will be.

The Bottom Line

If you do decide to buy a vehicle for your teen, looking for something older is the key. It will reduce the initial cost, cost of insurance in addition to giving you more peace of mind.

    • Teach your teen about the care and upkeep of a vehicle. If a family member is mechanically inclined, here is a great opportunity for time together as well as teaching the teen to take responsibility for this vehicle's care and the ones in their future.

    • Talk about cost of gas, tires, parts, etc. It is easy for a teen to think these costs are not significant when we know they are. Communicate, and then do it some more.

    • If your teen has a job, agree upon what they will pay for. If your teen does not have a job, here is an opportunity either before or after the purchase of the vehicle to teach about how important it is to be accountable financially.

    • Create guidelines for what is expected and any repercussions if an issue arises.

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