Is it spoiling a teen to buy them a car?

Parent Cafe
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<p>I’ve skimmed this thread but haven’t seen the insurance implications discussed. Check with your own insurer, as I suppose YMMV but the following has been true on all policies I have heard of: If the kid has his own car, the insurance cost is dramatically higher than if he is an authorized driver on a family car. Now, adding a teen is going to up your insurance substantially anyway. But you need to add into the money equation the insurance cost difference between a kid driving your car and a kid driving his own car. Corollary: the insurance company’s definition of whether the kid has his “own” car has nothing to do with who is on the title; it’s a matter of how many cars and how many drivers in the household.</p>

<p>In our family, we already owned 3 cars before DS turned 16, as DH had a little convertible sports car along with our two regular cars (see related thread I might start entitled Is it spoiling a 50-something husband to allow him to buy a little convertible sports car? ;)). So, even though no additional car was added to our fleet when DS got his license, insurance company saw him as having his own car. In our particular family, we were able to solve this because I’m self employed and could pull one car off the family policy to a commercial policy. Hence, 2 cars/3 drivers - no extra “surcharge” for a teen driving his own car.</p>

<p>Not saying one way or the other whether buying a teen his own car is “spoiling.” Others have covered all those bases, imo, and I agree it’s about the how and why, not the whether. As well as the “what” - brand new BMW, SUV… - spoiling. Utilitiarian older car - not spoiling, in my book.</p>

<p>When DH’s daughter was in her 20’s, he did the “I’ll match what you save” approach, which can be a good one. Kids (well, people) tend to appreciate and care better for things they have a financial stake in.</p>

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<p>Jmmom wrote:

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<p>LOL, I can relate! Except it happened at a younger age.</p>

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<p>ehh,</p>

<p>Well, as the younger child - I’ve always received the hand me downs. My first car was a 1972 Datsun 510 - which lasted about 6 months until it fell apart. Then I got my mom’s old BMW (it was a '93) which I had like the 2nd half of my senior year through my first year and a half of college. Then when my sister graduated from college - she no longer wanted the car my parents got for her (they leased her a 2002 civic) so the lease got turned over to me and we sold my bmw. Now the lease goes up in December so I’m finally getting my first real new car.</p>

<p>My parents basicly told me that they would pay what they paid for my sister - i.e. about $225 a month (which i guess was the lease on the civic). If i wanted anything nicer than a civic I would have to pick up the rest. So I struck a deal with them that I would get a part time job at school and I would pay any additional lease payment. So currently I’m looking at a Saab 9-3 - which will end up costing about $300/month. Not bad imo.</p>

<p>While I’ll admit I’m somewhat spoiled by my parents - they were very adament about me not having a “nice” car unless I paid the difference. I think that if you strike a deal with your kids that they will be responsible for paying for some of the car - then they will respect it and not be spoiled by it.</p>

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<p>You want to see insurance costs skyrocket, wait til he gets the first ticket and/or accident. That’s the reason to make it clear that the additional insurance cost is all his, incentive to keep the foot off the gas.</p>

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<p>^ speaking of that - it’ll be 3 years in march since i got my first my ticket…s, my points will be gone :wink: my parents will be happy.</p>

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<p>If he actually needs it, and will drive responsibly, I think you seem to have quite a sensible idea. If he’s already saving (assuming he continues), I think it shows quite good money management, so it’s also rewarding that show of maturity.
Will he be paying for the running of the car?</p>

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<p>Our insurance agent advised us to assign our kids to the oldest car we owned no matter which car they would be driving the most.</p>

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<p>My family:</p>

<p>If we got As and Bs, we would get a car (6-year-old hand-me-down Honda). I was required to do athletics during the school year; required to work summers. During summers, I did not get allowance and had to pay car expenses on my own. </p>

<p>In college, I had to pay all car expenses, save insurance - repairs, gas, oil changes, brakes, etc. For my parents, the cost of not trading in a car when they upgraded was not very much, and it was easier for them. I did have other responsibilities - running errands, etc.</p>

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<p>

I would be very careful about this. As I recall, our agent advised differently; that, like it or not, the premium increase due to adding a teen to the family policy would be based on the most expensive car on the policy.</p>

<p>I think you should be very sure before you follow the quoted advice. Because, if your teen mostly drives a newer/more expensive car and then has a claim,…</p>

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<p>Our insurance company (State Farm) made us assign a car to each driver and we were allowed to assign the old cars to the kids. If you have State Farm ask for a good student and safe driver discount. We were able to get them by showing report cards with a B average or higher and my son did a little program that included a common sense written test about driving.</p>

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<p>Each insurance company has its own way of doing things. Ours does not assign each person to a car, but just lumps everything together. For some strange reason, it actually saves us a few dollars to keep our son who is working in Japan ON the policy, rather than dropping him. Makes no sense to me!</p>

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<p>Driving is an essential skill, and students with serious activities need to commute often. Buying a student a used or cheap new car is not spoiling them.</p>

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<p>My insurance agent had the same advice as Packmom’s – put the kid on the oldest car, but she would be insured no matter which one she was driving.

Actually, its the opposite for us – if the kid is assigned to the older car and carrying liability coverage only for that vehicle, the cost are substantially less, especially with the 2-car family discount figured in. It would have cost at least 3 times as much to keep the 2 of us together insured on 1 car. There is no such thing as an “occasional” driver for my company – with a shared vehicle, I automatically lose all my old lady/safe driver discounts. We have Farmers. </p>

<p>As far as getting cars for the kids:</p>

<p>My son attended a high school within reasonable walking distance from our home, and also on a public bus line – so he never had a car in high school. I did put him on the insurance so he could borrow my car when necessary, but after he went off to college I took him off. He did not have a car while he was at college, and after that he lived and worked on his own in mostly urban areas and never owned a car, although he did have regular access to a car for a couple of years through the agency he worked for. </p>

<p>My d. attended a high school that was a longer distance – with traffic, about a 40 minute drive, and a rather convoluted array of public transportation options that would have taken well over an hour each way. So she carpooled or I drove her in the mornings, picked her up from the BART station in the afternoon (which got her about half way home). I planned to let her start driving as soon as she got her license, which she did immediately after her 16th birthday – but the very first week the radiator gave out on my old clunker while she was driving it, and I decided I wasn’t comfortable with my daughter driving an older, unreliable car. So I replaced the radiator on the clunker, and bought a used economy sedan for her use - she loved that car and definitely put it to good use. I gave my d. enough allowance to cover the cost of gas for the daily commute. I figured that the car was for my convenience even more than hers – I didn’t like losing time from work to chauffeur her around, and between school and her ec’s with late afternoon/evening activities there definitely was a lot of drive time. </p>

<p>This summer, my now 23-year-old son headed off to another college, in a remote Northern Calif. community, about a 5 hour drive from where we live and with limited transportation options… whereas d. was headed off to NYC for college. So I transferred title on the old clunker (still running after all this time) to him - and took back the newer sedan from my d. </p>

<p>So basically (answering the initial question) – I don’t think my kid was spoiled with a car. I supplied a car when there was a clear need for one. I think safety is enough of a factor to warrant purchase of vehicle for a teenager that the parents believes is safe & reliable. But I did make it clear from the outset that the car I bought for my daughter’s use belonged to me. Of course she treated it like it was her own, but the bottom line was that I was giving her <em>transportation</em> not an expensive new toy.</p>

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<p>We did not have to assign a kid to a car in either TX or TN. We insured 4 cars with 4 drivers. Each year the kids get older, the rates go down…</p>

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<p>My D inherited some money (a few thousand) from my deceased brother-in-law when she was 12. We told her she was not allowed to touch any of it until the three of us decided on strategy on how to best use the money. </p>

<p>Last year when D turned 16, she proposed using some of it to buy a used car so that she could drive herself to and from school, her job and ECs. We told her in order to do this, she had to pass drivers ed, learn how to drive a stick, stay on the honor roll and be in NHS. She fulfilled all of the requirements we laid out, and then some. We also had her sign one of those “driving contracts” in which we laid out rules as to when and where she could use the car.</p>

<p>Just before she got her license in March, we bought a 5-speed 1999 Escort in good condition which she put up almost 1/2 the money for, leaving her with a few thousand of her inheritance as $4,000 of her own hard-earned money. She pays for her own gas and 1/2 of her car insurance. Since the car was purchased, we have put a little more than 1,000.00 in repairs (all regular maintenance, i.e. inspection, oil changes, tires, brakes, air conditioning repair and a timing belt) which she contributes towards.</p>

<p>Granted, she has had 1 minor fender bender (she backed into a friend’s car) and the car has slight damage in the front bumper from a hit-and-run driver at a Dave Matthews concert, but otherwise the car is in good shape (albeit a little sandy from several summer trips to the beach). She keeps it in immaculate condition.</p>

<p>The advantages for us are that I’ve noticed quite a drop in my own gas consumption from not having to drive her around. My van now gets about 25 mpg since I’m doing mostly highway driving to and from work. Before, I was averaging about 19 mpg. Also the time I save not having to drive her everywhere means I can spend more time doing the things I should be doing as well as doing college, scholarship and financial aid research (and lurking around on CC!)</p>

<p>Do I think she’s spoiled; well maybe a little since we do contribute towards her car expenses. However, her car is no Ferrari, and besides most of the seniors in her H.S. now have either their own cars or they have access to a family car. Also, the lessons she is learning in responsibility are priceless. I notice that she is many times more responsible than I ever was at that age. In that respect, I think the car is paying for itself.</p>

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<p>My d also attended at school where brand new Hummers, Infinitis and BMWs presented with a big bow on the 16th birthday is very common. But thank goodness she is a practical girl. She didn’t expect a car at all and was grateful for the inexpensive, used 4-door we bought from Carmax. We felt it was a necessity because our city is definitely not a pedestrian-friendly, mass transit town and she just had too much going with afterschool activities.</p>

<p>I will say this…I highly recommend going with the used, old-but-safe car route. Teenagers will be ‘practicing’ in that first car. You hope and pray there isn’t a serious accident; but not many get through that first year of driving without a minor fender bendor or parking lot mishap or dings/scrapes. Our d rear-ended someone her first year. Fortunately, the driver she hit was extremely nice, stayed with her until we arrived so he could explain that he had been cut off and forced to stop abruptly. He didn’t want us to be too hard on her and he didn’t call the police. We still made her pay for the repairs and we wouldn’t let her drive the car until she repaid us. It took the first two months of her summer job wages… so she was extremely careful from then on. I am amazed at some parents who will immediately replace a brand new expensive vehicle after Junior totals it for the umpteenth time. Happens all the time in my d’s group of peers.</p>

<p>Our daughter’s car is in our garage now…she took a scooter to college instead. She claims having a car at school would be a pain and plans to use the scooter all four years. Works out great for us since we were able to drastically reduce the insurance coverage and the scooter gets about 80 mpg. :-)</p>

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<p>I like everything about your story, IDmom. Way to go against the prevailing trend in your D’s peer group.</p>

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<p>DramaPrincess, I haven’t figured out who will pay for what quite yet. (that is if we get him a car at all) Considering that he has no source of income ( and probably won’t for quite awhile) I guess we’d have to foot the bill as far as insurance gas, etc. If he were bagging groceries or bussing tables like some of the 14 yr. olds do here I’d let him have a car in a heartbeat. He has a 12 hour day before homework starts so there’s no room for afterschool jobs, and summertime is when he plays on his athletic circuit here. I started babysitting at 10 and always had my own money. Things seem to be different now, unfortunately.</p>