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Teenager Saves to Buy a Used Car
Teens Learning to Save
Most teenagers want to buy a used car by the time they are in high school and unless mom and dad are going to foot the expense, it is up to the teen to save his or her money for the luxury of transportation, which is excellent training in finances for the child. Some parents will match the amount of money the child saves each week which will certainly build up steadily. They should have a savings account from the beginning and deposit the bulk of their income into the savings account to buy a better car when they are ready. Keeping the money in a savings account is preferable as you also get interest. There are some other practical things to consider when they are going through this process. Teens have such busy lives between after school sports, band practice or any number of activities, that often mom is glad when she is no longer a taxi.
This is a quick guideline for teen saving:
- Start saving young, by 12 years old and put the money in a savings account.
- Set a goal of the total amount the family thinks is necessary to buy a dependable car.
- The teen should get a job when old enough and until that time they might make money by mowing grass and helping neighbors do chores.
- Always save a minimum of half of their earnings, plus they can save spare change which also adds up over a period of time.
- Evaluate your expenditures and eliminate those that you really don’t need.
Choosing Amount to Save
The first consideration is to set a regular amount they can afford to save. Once they are working, what other expenses to do they have? Do they pay for their own car insurance now? Do they pay for their cell phone or does their income have to cover all their entertainment expense? Parents typically pick up many of these expenses when possible; regardless the teen needs to know exactly how much money they have each payday, and they need a savings account. Ideally they will bank 50% of their income. The teen should keep a record of how they spend every penny of their money for 30 days and that will clearly show them of areas thy may be able to trim back.
Parents Guide Teens
When they get near the time of purchase they know the total amount they have and it is time to begin searching for cars in that price range. There are some online calculators that may be helpful for parents and the teen to look at how much must be saved over what number of years to reach a desired goal
Saving Money for a Car
Some teens start saving for a car as early as 12 years old. They have a better shot at reaching their goal over a period of a few years if they don’t set their sights too high. If they buy a used car it is important to get the car checked out to make sure they aren’t buying someone elses lemon. It is a good idea to have the car inspected by the mechanic you typically use.
When buying through a dealership they should consider a “manufacturer certified” used car, even if it a bit more expensive. A manufacturer-certified used car offers a cost savings since the car is used but more importantly they are “certified” by their manufacturers. Before they hit the showroom floor, they’re thoroughly examined by qualified technicians, refurbished to like-new condition, and then backed with a comprehensive manufacturer’s warranty. These warranties are available from nearly all manufacturers.
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Playing it Safe
Don’t shouldn’t buy the first shiny car they see as they need to do some comparisons. There are numerous recourses to determine a car’s worth. Two excellent resources are Kelley Blue Book’s website www.kbb.com or the National Automobile Dealers Association — nadaguides.com. Check out the Consumer Reports “Best and Worst Cars”. You can find them on line or in hard back which are kept in most public libraries.
Other considerations are car insurance as some cars are more expensive to insure than other. Another very important consideration is what gas mileage does this car get because we are watching gas prices soar upwards daily. How much mileage does the car currently have? Stay away from used rental cars as they aren’t always kept up as well as a privately owned vehicle.
It is important to know why the seller is selling when buying from an individual so request all records of maintenance and repair work. Also, order a full report of the vehicle’s history by using the VIN number through the service of an information provider such as CARFAX. For $20 you can check out as many vin numbers as you want. Then you will know if the car has been in an accident.
2015 Honda Civic
2014 Toyota Corolla
Choosing the Right Vehicle
The expenses that a teen must be aware of are gas, maintenance and car insurance. As a parent we must teach our teens that their chose of a used car should be economical to buy, regarding fuel, service and repairs. That is the first consideration in choosing a car, not looks.
Some of the better choices of used cars are the Honda Civic which meets the parent’s safety and economy having won the “Car of the Year” award from Motor Trend Magazine and it is one of the top picks of the Consumer Reports Magazine. As the new price on these cars runs about $15,000, a used car will probably be affordable.
The Toyota Corolla is another good choice. It is fuel economical and even more affordable to buy used than the Civic. The Toyota Corolla also has advanced safety features available so if you are buying a used Corolla. It isn’t technically a sports car but it does have a sleek design making it popular with teens.
There are several other good choices for teens if make the effort to find out the car’s history and check it out with a mechanic.
If you start having your child save when they are young, they not only will earn enough money for a good used car over a few years, they will also be learning a very important habit in saving money routinely. They will learn how to go about purchasing the right car with your help. Knowing that they can find out and compare prices and quality of various cars is an important key to ending up with a quality car. They also learn the importance of finding out about the cars history through Carfax, plus looking for the manufacturing certification if they are looking at used cars. There are many benefits in buying a used car for the teen in addition to receiving the new vehicle.
Some Online Help
... Know the car's history.
Edmunds.com ... All you ever wanted to know about cars and car buying.
Kelley Blue Book ... Good information on buying new or used cars, as well as the "blue book" value for used cars.
http://www.nadaguides.com ... National Automobile Dealers Association has good information on buying new or used cars.
Consumer Reports ... Provides car comparisons and repair history. You or your teen can access this site for $4.95 per month or $26 per year.
© 2011 Pamela Oglesby