Buying Your Kid a Car

By Diane Tait

Image courtesy flickr

Into every life a little rain must fall.  Or so the story goes.  Of course, for those who live in Florida, there’s no such thing as a little rain, is there?  One of the times when parents tend to feel as though the sky is falling is when it comes time to teach their children to drive.  That’s followed soon thereafter when buying your kid his or her first car.

So many cars.  So little time on the road. Unless you’re made of money, chances are you’re going to be looking for a dependable used car for your child.  I can still remember my first car, a ten-year-old Triumph Spitfire.  The great thing about British ragtops back then is they were super easy to work on.  The Spit’s front bonnet (otherwise known as the hood to us Yanks) hinged forward like a clamshell to make maintenance a breeze.  That was a blessing, since I think I wound up spending more time working on the car than driving it.  Of course, back then, nearly everybody tinkered with their cars.  Today it takes an engineering degree and a lift to work on most cars.  You can’t even really change the spark-plugs and the oil filter on some models.

That’s the bad news.  The good news is that modern cars are far more reliable than those available in the 80’s.  However, that doesn’t mean there aren’t tons of lemons waiting to be purchased by unwary buyers.  Cars are also vastly more expensive than they were back in the good old days.  That means you’re unlikely to find a car for a thousand dollars that’s likely to be worth a damn.  Heck, it’s hard to pick up anything reliable for under $5,000 these days. 

Image courtesy flickr

What you want isn’t necessarily what your kid wants.  The other problem is your child’s expectations.  Raised in a society where every third ad showcases a flashy automobile, chances are your child’s expectations are going to outstrip your willingness to purchase when it comes to a sensible car.  Of course, if you want your child to be safe while on the road, the last thing you want to buy is too much car for them to handle.  Think Driving Miss Daisy as opposed to the Fast and the Furious.  If your child wants to change the channel, tell them they may do so on their dime.  Explain to them that sensible cars don’t have spoilers, racing stripes or turbochargers.  More importantly, while you’re willing to spring for a set of wheels, your largess has its limitations.  One limiting factor is insurance.  Explain that you won’t be able to help them get a set of wheels if the cost of insurance is more than the car payments.  Not only is it expensive to insure teenage drivers these days, flashy cars cost a lot more to insure.  Putting a teen behind the wheel of a fast car costs a small fortune, even before you add maintenance, which most first-time drivers don’t realize is part of the equation.

What constitutes a reliable car these days is another conundrum most parents are forced to wrestle with when looking for a car for their kid.   A recent Kelley Blue Book report listed the top 10 used cars for under $8,000 as the 2010 Kia Soul, the 2009 Mazda 3, the 2008 Subaru Impreza,  the 2008 Nissan Maxima, the 2007 Subaru Outback, the 2010 Ford Crown Victoria, the 2009 Toyota Corolla, the 2009 Honda Civic, the 2007 Honda Accord, and the 2007 Toyota Avalon.  You’ll note that none of these cars are likely to win any races and that’s good.  They’re also unlikely to win any beauty contests.  But what they will do is get your child from Point A to Point B safely and comfortably.  (As opposed to the Spitfire which was anything but comfy.)  Before you settle on any particular make and model, it’s always a good idea to research them online.  You’d be surprised what you can learn with a web search.  It also wouldn’t hurt to talk to your mechanic to get his feedback, as well as arranging to have any potential contenders inspected before you seal the deal.  It’s amazing what a mechanic can see that buyers miss.

Image courtesy flickr

Is it better to buy from a dealer or an owner?  Once you’ve zeroed in on two or three contenders it’s time to shop.  Whether you buy from a dealer or a private owner is up to you.  Expect to pay 10-20% more through a dealership.  While that sounds a bit steep, it all depends on what you get in exchange.  Since you’re likely to buy a car that’s more than five-years-old, chances are the factory warranty will be long gone.  If a dealer offers you a warranty on a used car, you need to read the fine print to see what you’re getting for your money.  A 90-day warranty is really no warranty at all, since if the car falls apart after three-months, good luck getting any satisfaction, much less your money back.  On the other hand, if the car comes with a one-year warranty that includes parts and labor, this is worth considering, since if you buy a car through an owner, you’re on your own as soon as you drive it away. 

That doesn’t mean you can’t find quality used cars through private owners.  I should know since I’ve bought several that way that I owned for at least ten-years apiece.  When looking at used cars of any kind, there are three things that make or break the deal, wear, tear and mileage.  Especially if you don’t want to be forced to shell out a lot of money for repairs and maintenance, you need to determine how well-maintained the vehicle happens to be.  In Florida, this means finding out how old the battery is and when the tires were last changed. (Eyeballing a CarFax wouldn’t hurt either.)  If the car has more than 50,000 miles on it, when was it overhauled, or did the present owner leave this for the new owner to accomplish?  The last thing you want to do is shell out thousands of dollars for a used car only to find out that you’ll have to spend another grand or more to maintain the vehicle shortly after the purchase.  (This is another reason to have your mechanic look the vehicle over before you purchase it.)

Car-Insurance is another detail you’ll want to scope out sooner rather than later.  Depending on the make and model there can be a significant difference in the cost to insure a vehicle.  I advise you to call your insurance agent as soon as you create a short list of makes and models.  Before you even start shopping it would behoove you to find out how much any of the vehicles you’re considering will cost to insure.  The last thing you want to do is get your child’s hopes up, only to discover that the cost to insure a vehicle they have their heart set on is going to be a deal breaker.  It’s also a good idea to next discuss the vehicles you are considering with your child, since you don’t want to buy a car they absolutely hate.  If that happens, neither of you will consider it a good deal.

While you can’t make all the people happy all of the time, if you hope to make your child and your bank account happy at the same time, make sure you take the time to carefully consider all the variables before buying your kid their first car.  You can thank me later.

Diane Tait owns and operates A&B Insurance.  To find out more about how you can save money on auto insurance, go to her site or fill out the form at right.