Helping Your Child with Their First Car Purchase
With a blink of an eye, your baby now has their driver’s license. A big decision follows – what will they drive and will you help them get their first car?
To Help or Not to Help
The first decision for you is will you help pay for your child’s car and if so, how much will you contribute. Some parents have the ability to and are willing to purchase a vehicle for their kids but many don’t. There are three different scenarios – you can buy the car yourself and give it to your child, your child purchases the car, or you and your child purchase the vehicle together.
Purchase the Car Yourself
There are some advantages if you decide to purchase the car yourself. You have full control over the buying process including what car is purchased and how much money you spend. This option keeps your child from going into debt so early. The best advantage to this option is your kid will think you’re a rockstar!
The Child Purchases the Car
Your child buys the car on their own. This relieves you from any financial responsibility however you won’t have any control over what is purchased. Even if you decide not to contribute any money to the purchase, you can still assist them with the process and make sure they don’t get taken advantage of. It is a good idea to oversee both the purchase and payment of the car. This first big purchase is a teaching moment where they will learn responsibility and financial awareness while building their credit. But it is also easy without proper guidance to ruin their credit.
Purchase the Car Together
Consider purchasing the car together. This helps your child build credit and learn financial responsibility without as much risk at such a young age. This will also give you some control over what is purchased and the budget. Typically in this scenario, both names, the parent, and child are on the title or loan which means they are both responsible. This allows you to oversee the whole process and evaluate how your child is doing. If they get behind you can get them back on track before there is any damage to their credit or repossession. On the other hand, as you see them mature, you can give them more freedom.
Keep It Realistic
What your child wants and what you want will most likely be two different things. Parents are looking for an affordable, dependable car and kids want to have the coolest car in school. Once you’re ready to start shopping, talk to your kids about a budget and what they and/or you can afford. Have them look only at vehicles that fall in their budget. There is nothing worse than looking at a new luxury sports car when a used subcompact is in the budget.
There is no right or wrong. Everyone’s situation is different, and a decision shouldn’t be made without proper planning and discussion. Keep in mind there are more costs than just the original purchase price of maintenance, repairs, insurance, and gas. Turn this exciting time in your child’s life into a great learning experience.
Stop by your Local Tischer Dealership today where we would love to help you and your child with their first car purchase. To browse our inventory online, go to www.tischerauto.com