Your teen practiced with a permit, passed the test, and is ready for the keys. But buying a car is difficult under the best circumstances, maneuvering around safety features, payment agreements and insurance with a newly licensed teen is on another level.
Avoid potholes by paying attention to some simple dos and don’ts for car buying.
Finances
Do: Secure loan preapproval from a bank ahead of time if you are utilizing financing.
Don’t: Forget to put in writing what you agree on so you can both refer back to it throughout the process.
Buying a car is an excellent way to teach your teen how to have financial conversations, understand how interest rates work and factor in insurance and upkeep costs. Talk to your teen about the fact that the price on the sticker is not the true price of the car, and that title transfer fees, taxes and other hidden costs all factor into the final cost. Once you set a budget, write it down and stick to it. If you’re utilizing financing, walk your teen through the process of researching interest rates on loans and meet with banks ahead of time to secure preapproval for a loan before visiting a dealership.
Needs vs Wants
Do: Thoroughly research each specific car, including collision reports, and compare other models. Prioritize basic and critical safety features like brakes, seatbelts and airbags.
Don’t: Place too much emphasis on added features or a flashy car exterior.
Spend time together listing needed vs wanted features. Some of these are easy to assess — a moonroof is not a need — but some, like safety features, involve more nuance.
Josh Pavkov, of Layland Motors in Canton, says, “Safety first and foremost. Everything else can wait. The car has to be safe.”
He notes that more bells and whistles don’t necessarily translate to safer driving. While back up cameras, side sensors, collision warnings and driver assistive technology all sound nice, Pavkov says, “I think they are all a distraction. I would say advanced driver safety systems are making people less attentive as we are relying on a light to tell us what is going on rather than looking over our shoulder to see if someone is in the vehicle’s blind spot.”
Instead, parents should pay closer attention to obvious safety features like anti-lock brakes, airbags, traction control, and three-point harness seatbelts.
For new drivers, Pavkov recommends substance over flash, adding “They don’t need a Mustang or a Camaro. Kids should have something more like a family sedan. They are safe and roomy, it’s a good way to go.”
Once you’ve set a budget and identified needs, it’s time to shop.
When you find a car that fits the bill, take the time to do your own research. For pre-owned cars, look up the vehicle history report through services like Carfax or the National Motor Vehicle Title Information System. Help your teen walk through finding pricing factors like the Kelley Blue Book Value, look up what comparable vehicles sold for, and learn use resources like the National Automotive Dealers Association.
Test Driving
Do: Know what to look for ahead of time and plan your route.
Don’t: Ride with the radio on or windows down, which makes it harder to identify problem noises.
Pavkov emphasizes the importance of physically inspecting a car, especially when finding a car online. “It is common for people online to be misled,” he says. “You have to walk around the vehicle, physically look for rust and signs of wear.”
He tells buyers to inspect the tires for even wear, look for corrosion around the battery, check fluid levels, and look under the car for rust and damage. Pay attention to how the brakes are functioning and the smoothness of the ride. He also recommends bringing a friend on the test drive, planning the route ahead of time, and driving with the radio off and windows up, allowing you to listen for unusual noises.
Insurance
Do: Look into promotions like good student discounts, or online learning, to keep rates low.
Don’t: Rely on what you hear from others about their rates; talk to your insurance broker in person.
“With a few very rare exceptions, teens do not need to have their own insurance policies and can be listed as drivers on their parents’ insurance policy,” says Chris Winkelmann, independent insurance owner and operator. “As long as a teen is under the care, custody and control of [their] parents, it is typically in [their] best interest to stay on his parents’ insurance policy.”
He says that since parents often have a relationship established with an insurance carrier, they can qualify for benefits including bundling options and longevity discounts.
Winkelmann advises parents to ask what safe driver or teen incentive programs their insurance companies offer, like promotions for students who earn above a 3.0 GPA or complete online driver safety programs. Many companies also offer lower rates if a customer installs telematics — a sensor that monitors factors like speed, braking and distractedness.
“The biggest mistake parents make…is making assumptions or believing hearsay about the process,” Winkelmann says. There are so many variables in the process, he recommends scheduling an in-person meeting to walk through all of the options to maximize coverage without driving up the cost.
