If you're considering buying a car for a young driver, or helping them buy one, it can be a tall order. It's important to find one that's budget-friendly, affordable to insure, and most importantly — safe.
According to the Institute for Highway Safety, teenagers have crash rates of almost four times more for each mile driven, than drivers who are 20 years and older.
To Buy or Not to Buy?
Even though your child may want to hit the road in their own ride as soon as they get their license, this can be impractical, especially if they're just 16. Most of us grew up driving a family car, and often the vehicle had the dings and dents to prove it. The more experience your teen has behind the wheel, the more prepared they'll be when the time comes to take care of their own. Working hard and saving for their own vehicle will, of course take more time, but as they mature, they will gain a better understanding of the true cost of car ownership.
If they start saving money for a car, you may want to help them by contributing toward their car fund, instead of just buying them a car outright.
When You Buy, Put Safety First
According to many experts, it's best to avoid larger SUVs or trucks, which are harder to control. If you are looking at subcompacts or mini-cars, shop for those with top safety features. Choosing a midsized car or SUV with high safety ratings are good options.
And what are the must-have safety features? Side airbags and electronic stability control (ESC), reduces single-car crashes by helping drivers maintain control on slippery or winding roads. Any car build after 2012 will come equipped with ESC.
Keep in mind that used cars are in high demand right because of a worldwide semiconductor shortage. Since production on some new cars has slowed, consumers are snapping up quality used cars.
The Ratings Matter
To help you research cars, IIHS and the National Highway Traffic Safety Administration (NHTSA) conduct crash tests and then rate cars on their safety. This includes testing vehicles for how they perform in front, side, roll over and rear-crash tests. You can review their findings at safercar.gov and IIHS.org. IIHS also provides a list of recommended vehicles for teens Prices start at around $6,000 for buying used and approximately $20,000 for new vehicles.
More Education, Safer Drivers
One of the ways to ensure your driver gains better skills, check out additional driver safety education resources, such as teenSMART, an online program that has been nationally recognized for its results. According to California DMV reports, accident rates for teenSMART drivers were 30% lower than a matched control group of students from the same high schools who didn't take the training. There are also hands-on, advanced driving courses to teach teens how to avoid collisions. Many insurance carriers will give discounts for these courses.
The Cost to Insure
It's no secret that insuring a teen driver can be pricey — because they pose more of a risk on the road. So be sure to take the discounts designed specifically for teens. In addition to taking a driver safety course or advanced driving training, being a good student brings another discount; these discounts vary by state, so ask your insurance provider. Purchasing the right car will also reduce premiums. For example, a used, midsized car will cost less to insure than a sports car, and newer cars with extra security features bring discounts. And if you and your young driver agree to install an electronic device to monitor driving habits, you'll get a discount for that.
First-Time Auto Buyer Loan
If your teen is at least 18, buying a car for the first time and has limited (or no) credit history, this program is a great opportunity for you to build credit, and get a competitive, low rate so you can enjoy a manageable monthly payment.