Every Parent's Go-to-Guide to Buying Their Teen's First Car

Time for your teen to get his or her first car? This big decision may have you feeling a little bit overwhelmed. We've created this guide to walk you through everything you need to know about finding a safe and practical car for your teenager.

If you're a proactive teenager doing research on your own, you'll still find this guide helpful as it breaks down how to purchase a car step-by-step.

Step One: The Decision-Making Process

This first step includes all the factors to initially consider when purchasing a car for your teenager. They may seem like basic questions, but they're important. These key questions include fundamental decisions like when to buy a car, who will pay for the car, and setting clear expectations before the car is purchased.

Is It Time to Buy a Car?

Before you start wondering what the best car for a teen driver is, you should decide if it's the right time to buy. Before you invest a few thousand dollars or more for a car, ask yourself these questions first:

Is my teen ready for a car?
Why does my teen need his or her own car?
Where/when would my teen drive this car?
Do I have space for another car?
Can I afford a new or used car?

Once you've thought about these questions, revaluate your situation and decide if it is the right time to purchase a car. Even if you decide it's not the right time to buy or you're not quite sure, you can still start working through the rest of the steps. That way, when the time comes, you'll be ready to make the best choice for your teen and you.

Who's Going to Pay for It?

Many teens help pay for their own first car. If teens contribute financially and are involved in the purchasing process, it can offer them a sense of responsibility and make owning that more gratifying. It can also help parents shoulder the financial burden of a getting another car.

On the other hand, some parents want to surprise their teen with a car. Both options are perfectly fine and depend on what's right for you and your family.

Either way, it's important to consider these factors when deciding who will pay for the car:

How does my teen benefit from buying a car?
How does my teen benefit if I buy the car?
What role in the decision-making process should my teen have?
Why might I want my teen to help purchase the car?
Why might I want to purchase the car without my teen's help?
Am I financially able to purchase a car without my teen's help?
Has my teen expressed a desire to buy or to help buy a car?

Keep in mind that the cost of a car doesn't end with its purchase. Before buying a car, you should decide:

Who will pay for car insurance? Will my teen contribute?
Who will pay for gas?
When the car requires maintenance, who will cover the costs?

Answering these questions may take some time. Include your teen in these discussions, especially if he or she is actively involved in the car buying process.

What Kind of Rules Should You Establish Before Buying a Car?

Before handing your teenager the car keys, you should decide what kind of rules must be followed once he or she is ready to hit the road. This is a great opportunity to create a driving contract to help set clear expectations and consequences.

Here are some things you can consider including in your contract:

Will my teen have a driving curfew and if so, what will it be?
What will happen if my teen gets a ticket or into an at-fault accident?
Who will wash the car and how regularly?
Where can my teen drive?
What consequences will my teen face for breaking these rules or abusing their driving privileges?

Having a contract that answers important questions such as these can help settle disagreements in the future and prevent misunderstandings. It can also promote safe driving and serve as your teen's promise to drive safely and adhere to the terms of the contract.

Step Two: Finding the Right Car

Once you've completed step one, it's time to think about what car is the best option for your teenager. Consider these questions.

What Kind of Car Should You Get?

Now that you know who is buying the car, it's time to consider what kind of car you should purchase. There are two major categories you should choose between: new and used.

Should You Get a New or Used Car?

Both new and used cars have their pros and cons, and the decision makers should carefully consider what best fits the situation. Consider these questions:

Can I afford a new car?
What are the benefits of a used car?
What are the benefits of a new car?
How many years do I think my teen will drive this car?
What kind of car meets my teen's current needs?
How much will it cost to insure a new car? A used one?

Used cars are affordable and reliable. Since they usually come with a few dings, you don't have to worry about paying top dollar for a used auto. New cars, though, come with a lot of safety features that aren't available in older models. While there are plenty of safe used cars out there, newer models offer new technologies aimed at keeping drivers safe. However, new cars can be extremely pricey, and often have a higher insurance premium as well. A used car can still offer plenty of safety options for your teen but at a lower price.

What Features Should You Look for in a Car?

Every year new lists feature the best and safest cars for teen drivers, but the lists are rarely the same and name a wide variety of cars. The "best" car really depends on the individual and what meets your family's needs. To help you find the perfect car, we've compiled a list of factors to consider when looking.

Is Brand of Car Important? What About the Car Model and Style?

While we don't suggest you pick a car simply because of its brand, many people tend to lean toward one or another. When deciding what brands to consider, do some research and see which ones have a good reputation. Consider things such as overall durability, how the company handles recalls, and crash test ratings.

Take your time to pick which models you like, then dig a little deeper and research the model years to see what the common problems and complaints with that car are. Check for recalls, frequent manufacturing failures, and the overall opinion of people who own that model. Online reviews are a great place to start. Having this information will help you ask targeted and important questions once you're ready to buy.

Like the brand, we don't think focusing on a single model and a single year is your best option. Narrowing your search but still having a range of choices will help you snag a better deal.

What about style? Although it's not the important of these factors, it should still be considered. Don't let your teen forget that driving is a privilege. That said, no one wants to drive a car they dislike. If your teen is helping to pay for the car, make sure you ask what style he or she likes and see if it aligns with your more important priorities. Even if you are purchasing the car, it doesn't hurt see if there is a style your teen prefers that is still safe and affordable. While style shouldn't be completely ignored, it shouldn't determine your overall decision. Remember, it's okay to enjoy this process with your teen and have fun!

How Will the Car Choice Affect Insurance and Repair Costs?

When choosing which car to purchase, you should check to see how much it will cost to insure. New cars usually have higher premiums than used cars, but this isn't always the case. The safety features, mileage, and how costly it is to repair will all factor into insurance costs.

Remember that insurance is a tricky thing and can be difficult to predict. Your best option is to call an agent or go online to compare insurance rates. Keep in mind that the age of your teen, where you live, and how frequently the car will be used all factor into the cost of your car insurance. To learn more about how to find strategies and discounts to insure your teen, check out Everything You Need to Know About Insuring Your Teenage Driver.

That brings us to another key factor you should consider: cost of repair. All cars will inevitably require some maintenance. If you're driving an extremely old car, replacement parts may be harder to find and more expensive. Some people prefer to work on their own cars, so it can't hurt to see how difficult it is to rotate the tires, change the oil, and handle other basic maintenance requirements on your own.

Which Type of Brakes Should I Consider?

Though most cars these days have anti-lock brakes, a few older models will require manual pumping. Anti-lock brakes (ABS) are a safety feature that automatically pumps a break for the driver when coming to a sudden stop, which helps prevent skidding. Without ABS brakes, a driver must pump the brakes his or herself.

Newer car models now feature automatic breaks as well, though they're usually counted as an add-on and increase the car's cost. These brakes come with semi-autonomous cars that can "see" the road ahead. If a driver is not stopping for an upcoming hazard, the car will automatically brake itself.

Which Safety Features Should I Look For?

Cars come with a myriad of safety features, some of which are now considered standard and others you still need to pay a little extra for. When choosing a car, you should make sure it comes with these standard features:

Airbags
Traction control
Safety seatbelts
Electronic stability control
Anti-lock brakes (ABS)

However, there are a lot of new features available. Some of these include:

Brake assist
Automatic emergency breaking (AEB)
Pedestrian detection
Forward-collision warning (FCW)
Blind-spot warning (BSW)
Adaptive cruise control
Automatic high beams
Backup camera
Rear cross-traffic alert
Lane-keeping assist (LKA)
Blind-spot warning (BSW)
Active head restrains
Parking assistance
Fog lights

These features are often considered add-ons and will increase the cost of a car. They're also infrequently available in older model cars.

The safety features your teen's car has will also affect how high your insurance premium will be. While you'd naturally assume that having more safety features would decrease your premium, it's not always the case. These features increase a car's value, which often makes it costlier to insure.

How About the Safety Rating?

Before you start looking at cars, you should always check their safety ratings, standards set by the United States Department of Transportation. A car's safety rating can be based on several factors, including frontal, side barrier, side pole, and rollover crashes. You can find these ratings at the National Highway Traffic Safety Administration's site. Alternatively, the non-profit organization Insurance Institute of Highway Safety conducts separate safety tests.

Which Type of Transmission Should I Choose?

There are two main kinds of transmissions: automatic and manual. Most cars are now automatic and are considered easier to drive. However, some older cars and foreign brand cars still come with manual transmission.

Remember that a manual transmission, or a stick shift, requires the driver to change which gear the car is in. Automatic transmissions do this for you.

What About Fuel Economy?

Cars can have a fuel economy between 12 to 124 miles per gallon (mpg). Most are somewhere between the 24–34 mpg range, though the scale slides higher each year. What kind of gas a car uses significantly impacts its fuel economy, and hybrids or electric cars generally have a better mpg than gas-powered vehicles.

When choosing which works best for your teen, consider where the car will be driven, for what purpose, and for how long. If your teen will use the car to commute to work or school regularly, you might consider a car with a high mpg.

Step Three: Purchasing the Car

Once you have a few models to target, it's time to start looking for a car. One of the very first things to consider is buying a new car vs. buying a used one. Because of the higher cost of new cars, many parents and teens opt for a used car for first-time drivers.

Where Can You Shop for Used Cars? Should I Visit New Car Dealerships?

To buy a new car, you must go through a dealer, while used cars offer a few more options. In fact, there are an overwhelming number of places to purchase a used car, and the deals and guarantees you'll get vary between your options.

Another safe but expensive option is to purchase a used car at a new car dealership. Usually the dealership will handle the car registration for you. Cars are typically inspected to make sure everything is in working order and come with a warranty of some sort. However, these cars will be very expensive. While you can haggle down the price, you'll still end up paying more. Make sure you check to see if there is a dealership fee too, which often isn't included in the car's base price.

What About Auto Superstores and Independent Dealerships?

Cars sold at auto superstores lean towards the expensive side, but again, you have some room to negotiate. Some superstores have a solid reputation and make the overall buying process relatively painless. Cars will usually look nice with minor dings and scratches, but fixing a car's cosmetic issues will increase its cost. Be sure to ask about dealer fees, guarantees, and what sort of inspections the car has undergone.

Independent dealerships without the brand name behind them can still offer you a good deal. These cars cost less than a new car dealership or auto superstore, but often they'll look a little more banged up. Before driving off the lot with one of these autos, you should make sure the car has been inspected either by your mechanic or the dealership.

Are "Buy Here-Pay Here" Dealerships a Good Choice? What About Government and Impound Auctions?

Buy-Here-Pay Here dealerships are places where you can purchase a car despite your credit history. Cars are usually sold for a fairly high price hidden behind set installments which make the car seem cheap. More than likely, you can find a better deal elsewhere.

Cars at government auctions sell for low prices, but they come with no guarantees. It's a risk, especially if you don't know how to judge a good car from a bad one.

You can find some good deals at impound auctions, but without experience you might end up with a lemon and no way to get your money back. Since these are coming from an impound lot, you're often given no information about them before purchasing.

What about Independent Sellers and Online Shopping?

When an owner sells his or her car without the help of a dealership, you can often find amazing deals, as cars in great condition are often sold for reasonable or even low prices. The risk, however, is a little higher. With a private sale, you should make sure the car is inspected before buying it. It doesn't hurt to get some form of contract between yourself and the owner too. Don't forget that you'll have to handle registering the car on your own, which will include some state fees.

While some of the places listed above list cars online, shopping for car solely online is a viable option. Depending on what site you're buying on, you may or may not actually see the car before paying for it, so this can create a high risk. Be sure the person/place you're purchasing from has a good reputation and offers some form of guarantee.

Step Four: Ready, Set, GO!

As you can see, when it comes to buying a car for your teen driver there are a lot of things you need to consider. Break the process down into steps and know where you stand before moving forward in the process. Figure out how you want to buy, what you want to buy, and where you want to buy it. We advise that you keep a couple of options open so if a great deal comes along you don't miss it.

Don't forget that getting a new car creates a great opportunity for you to open a dialogue with your teen about safe driving. You plan on getting him or her the best and most safe car you can find, so make sure your teen is driving in a responsible manner as well.