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November 5, 2015

How to Prepare Your Teen for Buying a Used Car

Your teenage child just earned his or her driver’s license! What’s more, he or she has been saving up big time to buy a used car. (No having to share a car with Mom and Dad for this offspring of yours, no indeed!)

Your teen’s dream car undoubtedly is far more expensive than he or she has saved, so some financial reality likely is to meet your child head on as he or she goes car hunting.

To help you prepare your teen for buying his or her first used car, we’ve put together a primer of sorts. Print it out and hand it to your eager-to-buy-a-car offspring, or send your child the link to this post.

Getting Ready to Buy Your First Used Car

So, we hear you’re in the market for buying your first used car. To help you out, we’ve put together some pointers for you here.

What’s that you say? You’re buying a new car, no used car for you? Well, we hope you rethink that quickly because – seriously  – have you priced new cars lately!? Also, used cars between 3-5 years of age can be terrific bargains because they often are in great, almost-like-new shape, and they cost a ton less than a new car. In fact, it’s well known that new cars lose a huge chunk of their value as soon as you drive them off the lot. We truly hope you’ll reconsider your choice and buy a used car.

Before you head to a dealership, you should do some research. You need to decide on a budget for your car and you need to promise yourself that you’ll stick to that budget, no matter how much a more expensive car appeals to you. Your pocketbook will be emptier far longer than the excitement of that more expensive car stays with you. Remember, decide on a budget and stick to it!

There’s more to operating a car than what you pay for it.

Don’t forget also to factor in the cost of insuring the car, replacing its tires, maintenance, etc. That’s why a smaller used car is better on your budget than a bigger, more powerful one. Cars with more powerful engines tend to use up gas faster than cars with smaller engines. Smaller cars also are less expensive to insure. Tires tend to cost a lot less, as well. All of these things should be factored in to your budget.

Is a car loan in your future?

If you haven’t saved up enough money to buy a car for cash, you’re going to have to take out a loan. You probably don’t have much of a credit history yet to get a loan yourself, so you should start talking to your parents to see if they will co-sign a loan with you. Understand that your parents are taking on just as much risk as you are on a co-signed loan, so if you default on the loan, the loan company will make them pay for the car. In addition, if they can’t afford the payments and they default, it will ruin their credit. (By the way, your credit also will be ruined if you default on the loan.)

Your parents are doing you a huge favor if they co-sign a loan with you. A huge favor! Don’t let them down: make sure you pay the loan payment each and every month, on time, every time.

There’s a lot more to buying a used car than we can add to this post. That’s why we have other posts that help you learn how to negotiate the selling price a car, how to avoid common mistakes, how to finance the car,  how to shop for a car loan, and more.

We’re known here at PAACO for helping people finance cars so that the monthly payment doesn’t break their budget. Visit the PAACO location nearest you and talk to one of our sales professionals/finance experts. You also may call us at 877-810-4555 for more information.

Image courtesy of State Farm Insurance /Via, with Creative Commons license

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