Helping Your Teen Buy Their First Car
Negotiation, Insurance, Warranty.. Where Do I Start?
There are many steps to making sure your teen driver can take to the roads safely, here are some tips for a few of them.
By The Editors
Thu, Aug 25, 2022 08:25 PM PST
You've finally reached the point where your teen is ready to start driving. But before they can hit the open road, there's one crucial thing you need to take care of: their car insurance. Car insurance coverage for a teen can seem astronomical, but you'll be glad you've invested no matter what the car insurance costs when they're in their first collision.
Adequate car insurance coverage is just one of many aspects you need to talk to your teen about before they begin their search for a new car. When looking for a new vehicle, the type of car you buy will drastically affect the cost of your insurance, parts, maintenance, and the safety of your teen's driving experience.
Why is Car Insurance so High for Teens?
The short answer is: because they're inexperienced. And that inexperience comes with a higher risk of accidents. In fact, according to the Centers for Disease Control and Prevention (CDC), teen drivers are three times more likely than older drivers to be involved in a fatal crash.
So how do you get your teen driver insured without breaking the bank?
As much as we harp on our teens to pay careful and dedicated attention to the road, there is a good chance they're not driving as focused as they could be. One text from a friend or one disruption from passengers in the back can spell disaster for anyone, especially teens.
How to Get the Best Rates
The cost of car insurance for a teenage driver can be pretty high, but there are ways to save. Here are a few tips to help you keep the cost down. If these don't do enough to bring your price to a manageable range, consider working to tighten your car budget elsewhere.
Shop and Compare
Don't just go with the first company you find. Get quotes from several different companies and compare them.
Consider Your Coverage Options
The first step is to decide what kind of coverage you need. If your teen is driving an older car, you may not need as much coverage as you would for a newer car. But remember that even an older car can be expensive to repair.
Ask About Discounts
Shopping for car insurance can be a confusing and frustrating process. There are so many different companies and policies to choose from, and it can be hard to know if you're getting the best deal. However, you can do a few things to save money on your car insurance.
Another thing to remember is that your car insurance rates will likely go up if you have any accidents or traffic violations on your record. Be sure to drive safely and obey the speed limit to keep your rates low.
Review Your Policy Annually
As your teen gets older, they will (hopefully) become more experienced behind the wheel. As a result, their rates should decrease. If they don't, it may be time to switch to a different company. Companies typically offer discounts to drivers with a clean record and no accidents.
So, if your teen's rates are staying the same or increasing, it may be time to look into other options. Many companies out there specialize in insuring young drivers, and some even offer discounts for good students or for taking driver's ed classes. So you're sure to find one that fits your needs. Shopping around is the best way to ensure you get the best possible rate for your teen driver.
Enroll in a Drivers Education and Defensive Driver's Course
Enrolling in a driver's education or defensive driving course is a great way to receive a discount on your auto insurance rates. Many insurance companies will offer a discount for teens who complete these courses, and adults may also be eligible for a discount if they take a defensive driving course.
These courses can help you to become a safer driver, and the discounts can help you to save money on your premiums. In addition, taking a driver's education or defensive driving course can also help you to become eligible for a good student discount. So, enrolling in one of these courses is an excellent option if you are looking for ways to save money on your auto insurance.
Buyer's Budget - Your First Car
Even if your teen is working after school, it may be unrealistic to expect them to buy and finance a car on their credit and work history. You'll need to consider their budget to find a car your teen can afford. How much money can they afford to spend on a car? This includes the purchase price and insurance, gas, and maintenance.
You may need to help them finance the car by co-signing for a loan or leasing the vehicle. If you do invest in the car, be sure to shop around for the best interest rate and terms.
Once you've found a few cars that fit your teen's budget, it's time to start test driving. They should be the ones to test drive the vehicles and decide which one they like best. But, make sure you get a second opinion from someone you trust that knows about cars (maybe that's you?).
After your teen has chosen a car, it's time to start negotiating. If you're buying from a dealership, bring along a friend or family member who is experienced in dealing.
Once you've agreed on a price, it's time to finalize the sale. Be sure to get everything in writing and ensure the car has a warranty. You don't want to end up with a lemon.
After completing the purchase, it's time to transfer the title and registration. You'll need to do this within 30 days of the purchase.
You should also have your teen's car insurance policy in place before they start driving. If you're unsure what coverage to get, be sure to speak with your insurance agent, who can help you choose the right policy for your teen driver.
Congratulations! You've helped your teen to purchase their first car. Now it's time to sit back and enjoy the ride.
image credits: David Emrich (featured image), Per Lööv, and Bruce Mars.