Getting Your First Car? A Must-Read Car Guide for Teenage Drivers
Published: Saturday, June 12, 2010
Most newly-licensed 16-year-olds will tell you the first time they got behind the wheel without a parent was not only a moment of freedom but also a moment when they suddenly felt more grown up. Yet, this freedom is not without cost. This is the time to talk with your parents about the added financial responsibility that comes with the privilege of driving.
Whose credit will you use?
Many teenage drivers don’t have the chance to build credit before purchasing their first car. According to many car experts, here are a few things lenders look for before approving you for a car loan:
· Monthly income of $1,600 or more
· Consistent address and same employer for at least six months
· At least one year of established credit
Not meeting these requirements and lacking established credit means that the average teenage driver will probably need a co-signer on their first car loan. This is common and will help a new driver build up their credit and will keep parents (or another responsible adult) involved in the process.
Who’s footing the bill?
Before you start shopping for your first car, figure out who’s paying for what. Are your parents chipping in or helping you come up with a down payment? Are you solely responsible for setting your budget? These factors can help you decide whether you should look for a new or used car, and whether you should lease or buy.
Your parents can be a great resource for information and advice. Start a conversation with them by asking:
· Do they feel comfortable co-signing for a lease or loan?
· Would they be willing to purchase the car themselves and let you take over the payments?
· How can you save up enough cash to purchase a used car on your own?
Whatever you decide, setting expectations can help you find the car that fits your budget.
Whose insurance policy will cover you?
Whether you lease or buy, there’s one thing you cannot forget to do before you have the keys to your first car – compare auto insurance quotes. Car insurance for teenagers isn’t cheap, but you can qualify for auto insurance discounts to save some of your hard-earned money.
Your parents can take advantage of a multi-policy discount by adding you and your car onto their existing policy, so ask them if they’re willing to do this. Some policies offer a discount if you complete a defensive driving course. Lastly, find out if your car insurance company offers a good student discount if you get good grades.
Who’s covering the miscellaneous vehicle expenses?
The cost of driving is more than just your monthly car payment. From filling up the tank to regular maintenance like oil changes and tire rotations, cars are expensive. Whether you lease or buy, it’s important to be prepared to maintain and manage this new purchase. Even car washes and regular maintenance can add up. So, take the surprise out of your car expenses and put a plan in place before you make a purchase.
Getting your first car is no doubt one of the most exciting and memorable events of your teenage years. Who doesn’t remember their first car with nostalgia and fondness, no matter how rusty it was? There’s no better way to enjoy this experience than by planning ahead.