If your teenager has already enrolled in a driver's education course in anticipation of getting his or her own license, you may be bracing yourself for the bevy of expenses that will soon be coming down the pike. Unless you're planning to let your teen borrow your family's current vehicle whenever he or she wants to drive, you'll likely need to go car shopping. And even once you've decided on a suitable car in your price range, you'll need to take into account the taxes, insurance, and other potential expenses that will need to be paid once ownership is transferred. What can you do to get the best value for your money, and which options should you avoid? Read on to learn more about the factors you should consider when choosing a vehicle for your first-time driver.
Is a vehicle lease a good option for a teen or new driver?
While leases can be the ideal financial and logistical arrangement for professionals who use their vehicles to transport clients, those who frequently travel outside the country for months at a time, or simply those who want to buy a brand-new vehicle every few years without the depreciation hit, they're not often a good idea for teen drivers.
Not only will your teen be restricted when it comes to the number of miles he or she can put on this vehicle during the lease term, your teen will likely be charged a higher insurance premium or even assessed "gap insurance" -- the difference between the amount owed on the lease and what an insurance company would actually pay if the vehicle were involved in an accident. Because teen drivers are already a statistically high-risk group, adding additional layers of insurance can be a costly prospect.
While benefits like an extended warranty and "free" maintenance can be tempting (as can the lower monthly payments often associated with a lease), unless your teen has a special set of circumstances, it's unlikely leasing is the most economical option.
Should you buy a new or used vehicle for your teen driver?
If you've decided that a vehicle purchase is in the cards, your next step will be to decide whether a used or new vehicle makes the most sense.
For those who have already eschewed a lease for financial reasons, buying a new car may carry its own high level of expenses. Even if you choose to purchase an inexpensive base model vehicle rather than a souped-up SUV or luxury sedan, your teen will likely be assessed a much higher insurance rate than you (or another adult with a good driving record) would pay. And unless you're prepared to shell over the purchase price in cash, your teen will be required to carry "full coverage" insurance (including gap insurance in some cases) until the loan is paid off.
However, while a used car may seem to be (and often is) the financially prudent choice, you'll still need to do some investigation before making your selection to ensure you don't inadvertently stick your teen driver with a money pit. If your teen already has a certain brand or model in mind, you may want to investigate the purchase of a certified used vehicle.
These certified vehicles are usually relatively late-model (making it easier to take out an auto loan), and carry an extended warranty following a thorough pre-sale inspection. This can provide your driver with the best of both worlds -- the lower purchase price and insurance cost associated with a used vehicle, and the peace of mind of a guaranteed warranty against repair expenses while your teen is still adjusting to the nuances of car ownership.
For more information about getting a car for a new driver, contact a dealership such as Quebedeaux Buick GMC.