The Joy of Your First Car: Helping Your Teen Buy a Good Used Car
The first thing to consider when helping your teen buy a car is figuring out what he can afford. Not only do you have to consider the price of the car, but maintenance and repairs, insurance, and gas. What monthly payments will be reasonable for your teen, whether he is taking care of the entire cost or not?
You will also in all likelihood have to co-sign for the loan, since lenders are looking for a good credit score, employment history and financial assets. The best solution might be to have your son borrow the money from you, and then pay you back.
To be sure that your teen doesn’t break the bank, he should look at small to midsize sedans or hatchbacks, and avoid the flashy models, even though that is what may attract your teen the most. The flashier models will carry higher insurance premiums, and the larger engines will use more gas.
Use publications such as Consumer Reports and online car sites to determine a car’s reliability. This is important because it will also give an indication of the cost to maintain it. The more reliable the car, the less you should have to pay more repairs.
Check It Out
You know a new car is in great condition, but you cannot be certain of the condition of a used car. The previous owner may have taken good care of it and visited the service center for regular maintenance. On the other hand, it may have been owned by someone who did not take very good care of it.
That is why it is always a good idea for the teen to visit the car dealership with a knowledgeable adult. You need to carefully inspect the car from top to bottom, its body and engine. Take it for a test drive on side roads and on the highway. See how it performs. Check the oil and transmission fluids.
It is best to have an independent (not from the dealer) mechanic take a look at it.
There are two prices to every vehicle – wholesale and retail. The wholesale price is what the dealer paid for the car. The retail price is what the dealer is selling it for. You want to get as close to the wholesale price as possible.
The key thing to remember is what you can afford. If the cost of the vehicle is more than you can afford, you need to walk away. Don’t get too focused just on what the monthly payments will be. It is the total of all of those monthly payments that you have to worry about.