Cast your mind back to your first car and how exciting that moment was. Now think about the joy that your child stands to gain when they discover new-found independence through their first car. Of course, helping a teenager secure their first car means that you are likely to be shopping for a different vehicle than the one you might drive yourself. However, that doesn’t mean you won’t have issues to consider if you’re buying this car as a gift.
Looking out for your teenager
Your typical teenager has no idea of the costs involved in running a vehicle. They might see you fill up petrol or take the car in for the odd repair, but as we all know, there is a lot more to it than just that. On this front, parents need to make sure their son or daughter are prepared for the costs that come with owning a car. After all, you don’t want to set them up for financial strain! Budgeting advice can go a long way, so share any tips that you’ve learnt along the way. No matter what, don’t cave in and buy a car for your child if they don’t have an income of their own. You don’t want to get stuck as the go-to party when it comes to keeping the car in good order.
Arranging your teen’s new car
Once you have that side of things in check, you will need to decide how to purchase the car. Are you going to apply for car finance? Who is going to make the repayments, you or your teenager? Or are you going to split the repayments? How much of the purchase price of the car are you willing to fund and how much will your son or daughter need to produce? Although there are no right or wrong answers, you do need to have all your affairs in order. If a loan is necessary to purchase the car, it may be easier for the parents (who usually have stable jobs and a better credit history) to take out the loan and arrange with the kids how they will repay the money.
As alluded to earlier, you also need to negotiate who’s going to pay for what. There is insurance, fuel, repairs, registration and all those other ongoing costs to be taken care of. Unless you’re feeling like a charity, these bills should not automatically be taken care of by the parents. It’s a good habit to get young adults into the habit of taking some responsibility. However, there is some room for negotiation rather than just insisting that your teen take on everything. Parents may want to take care of third-party insurance, for example. Alternatively, parents may contribute towards fuel and other running costs in exchange for getting your child to run errands using the car.
Take the time to talk it through and educate your teenager about what it means to own a car. They might decide another form of transport is more suitable until they’re in a better financial position, but unless you are open and frank in your discussions, you’ll never know.
The Fincar team is here to help you with all your financing needs. Contact us today to help arrange your next car or equipment loan.