Getting a first car is a rite of passage for many young drivers. But while jumping into the driver’s seat of their very own set of wheels is certainly something to look forward to, there’s a lot of work that needs to happen before they can be handed the keys.
Whether you’re buying a car with, or for, your teen, here’s what you need to know to help the process go as smoothly as possible and ensure their safety, financial responsibility, and overall well-being.
Contact your insurance provider to get quotes for the cars you're considering so they can advise you on what the most affordable cars to insure are. This will also help you and your teen set expectations when car-shopping — While your teen might think they’re ready for a sports car, that won’t be easy on either of your wallets. Meanwhile, you’ll get a clearer idea of just how rates can increase for young drivers.
Insurance rates can vary significantly based on the car's make, model, and age, in addition to your teen's driving record.
Do your research on choosing the right car
Finding the best new and used cars for teen drivers involves a lot of research. But the upfront work will hopefully pay off down the road once your teen gets behind the wheel. Here are some things to consider:
Adding your teen as a secondary driver to your insurance policy as soon as they get their driver's license is important as it builds a history of continuous insurance coverage. Having a consistent insurance record can help them qualify for lower insurance rates when they eventually become the primary driver of their own vehicle. It can also help lower their rates once they get their own policy — so long as they maintain a clean driving record.
Now you’ll have another reason to make sure your teenager does their homework every night. Many insurance providers offer discounts to students with good academic records. These discounts, often known as "good student discounts," can significantly reduce the cost of auto insurance for teenagers who maintain a specified grade point average (GPA). Good credit will also help them secure financing for their car and keep their rates affordable in the short-term, generally sets them up for success later.
Usage based insurance (UBI) can be an excellent option for keeping auto insurance premiums down, especially for teen drivers. UBI policies use technology to track driving behaviour and offer personalized rates based on how safely and responsibly the insured person drives. Before choosing a UBI policy for your teen, discuss the program's terms and conditions with the insurer to fully understand how it works and how it may impact your teen's insurance rates.
Read more: As insurance premiums rise, quotes for usage-based auto insurance increase by nearly 20%
Make sure your teen is financially responsible enough to make any car payments or you could put yourself at risk. If your teen is a minor, be prepared to co-sign the purchase contract and any car loans you decide to take out. If you’re co-signing the loan, you should be able to take on this added financial obligation should your teen no longer be able to meet the terms of the agreement.
Car payments aren’t the only costs you’ll both have to weigh when buying a car for your teen. Be sure to discuss who will pay (and how much they’ll pay) for vehicle expenses such as the car itself, gas, insurance, repairs, registration and taxes, licensing and driver's education, tickets and fines, plus parking and tolls. It's important to establish clear guidelines for who pays for what to avoid misunderstandings and ensure that both you and your teenager have a shared understanding of the financial responsibilities.
Many insurance providers offer discounts for insuring multiple vehicles under the same policy. Adding your teen's vehicle to your existing policy could lead to cost savings. You can also bundle your home and auto insurance for a move favourable insurance rate.
Shopping around different auto insurance rates is a crucial step in the process of buying a car for your teen. Insurance premiums can vary significantly based on various factors, including the make and model of the car, your teen's driving history, and your location. Plus, some insurance companies cater to young drivers and offer good student discounts, or discounts for those who’ve completed driver’s education programs. Additionally, regularly reviewing and adjusting the policy as your teen gains driving experience can help you continue to find cost-effective insurance solutions.
RATESDOTCA makes it easy to compare auto insurance quotes from more than 30 insurance providers. Taking a proactive approach can help you find the most favourable insurance options for your teen.
Read next: First time getting car insurance? Don’t worry, it’s simpler than it looks!