Teenagers are often eager to get their own car once they receive their driver’s license, but there’s a tricky question to answer first. Should parents buy their child a car, or should the child pay for it themselves?
The issue is surprisingly controversial. In fact, one survey found Americans are nearly perfectly divided, with 49% of respondents reporting they got their first cars from a parent and 51% saying they bought them independently.
If you’re trying to determine which route to take, this guide will help you decide. Let’s explore the pros and cons of each choice, the most significant factors to consider when choosing, and some ways to get the best of both worlds.
Should Parents Buy Their Child a Car: Pros and Cons
There are benefits to purchasing a car for your child, but there are also good reasons to consider making them pay for it themselves. Here are the pros and cons to consider when thinking of buying your child a car:
➕ Pros of Buying Your Child a Car
Your child will be able to come up with a million reasons why you should get them a car, probably starting with the fact that their friend got one. But in reality, there are two main reasons to buy them a car instead of letting them do it themselves.
First, it’s a chance for you to give your child a financial head start and set them up for long-term success. When you cover the cost of the vehicle, they’ll typically be able to:
- Avoid taking on an expensive auto loan.
- Hold onto any cash savings they’ve set aside.
- Get a car sooner than they could on their own.
Second, buying a car for your child means you have direct control over what they drive. You can choose a vehicle that’s safe, reliable, and economical. Left to their own devices, a teenager might buy something they think looks cool and exclude more important considerations.
➖ Cons of Buying Your Child a Car
Of course, buying your child a car also has its drawbacks. Most obviously, you have to fund the purchase, and that’s not always something parents can afford. Even if you choose a relatively modest make and model, a car is expensive.
The less tangible but no less significant problem is that buying a car for your child can hamper their personal development. Working hard for their first car gives a teen a chance to feel a sense of independence and accomplishment at a pivotal age.
When you buy a car for your child, you take away an opportunity for them to learn valuable lessons about hard work, self-reliance, and financial responsibility, such as:
- How to find, secure, and hold down a job
- The value of money and what it takes to earn it
- How to delay gratification and save for the future
In addition, giving your child a car can make them more likely to take it for granted, and they may drive it more recklessly. That’s something to avoid at all costs, as motor vehicle accidents are the leading cause of death for teenagers.
⚠️ If your child is male, you should emphasize this aspect of the decision even more. The motor vehicle death rate for male drivers between 16 and 19 years old is three times higher than for females of the same age group.
Should Parents Buy Their Child a Car: 4 Questions to Ask Beforehand
Now that we’ve discussed the primary arguments for and against buying your child a car let’s look at a series of questions you can use to help figure out the right option for your circumstances.
1. Can You Afford It?
Buying your child a vehicle is, first and foremost, a financial decision. With even used cars costing roughly $33,000 on average these days, it’s not one to take lightly. As a result, the first thing you must figure out is whether or not you can afford the expense.
To assess your capability, consider the following:
- Do you have enough cash to pay the upfront costs comfortably?
- Is your monthly cash flow sufficient to cover the recurring costs?
- If you need a loan, is your credit score high enough to secure a reasonable interest rate?
If you answered no to any of these, you’re probably not in a position to buy your child a car, and you shouldn’t force the issue. It isn’t a prerequisite for being a good parent, and overextending yourself to make them happy will often backfire.
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2. How Much Would It Benefit Them?
As we’ve established, buying your child a car can give them a significant financial head start. They get to become a vehicle owner without going into debt or depleting any savings they might have. In addition, they’ll be able to take themselves to school or work, which is a huge benefit to some families.
However, making your child a car owner isn’t always necessary. In fact, it may not even be beneficial in some cases. For example, here are some situations in which a child having their own car would be of limited use:
- You live somewhere with good public transportation.
- Your child plans to go away to college, where it’d be hard to bring a car.
- You own multiple cars, so your child can borrow one without much inconvenience.
In these circumstances, buying your child a car may not be worthwhile. It could even be a net negative since you’d incur additional costs and need to park and maintain it. If that’s the case, it’s probably best to postpone the purchase, at the very least.
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3. What’s the Opportunity Cost?
Say you can afford to buy your child a car and feel confident they’d benefit from it. The next question to ask is whether it’d be the best use of your resources. Every dollar you spend on their vehicle is one you can’t spend on them elsewhere, and parents have many other expenses they may want to cover for their children.
For example, consider whether it might be more beneficial to put the money you’ve budgeted for your child toward one of the following costs instead of buying them a car:
- College expenses: In addition to tuition, sending your child to college generally means paying for a meal plan, housing, and school supplies.
- Wedding costs: Parents often contribute to their children’s weddings, which cost a whopping $30,000 on average in 2022.
You should also think about using the funds for things that aren’t directly child-related. After all, improving your personal financial situation can benefit your children in a roundabout way, too.
For example, paying off your high-interest debt can free up more cash flow for supporting your children. Conversely, putting money into your retirement accounts means relying less on your children for support in your elderly years.
📗 Learn More: Wondering if there’s any truth to the buzz about college not holding its worth anymore? Our new post critically examines this standpoint.
4. How Responsible Is Your Child?
Last but not least, consider your child’s character and personal development. Ask yourself whether they’ve proven to be generally responsible or still tend to be impulsive.
Given that context, think about the impact giving your child a car would have on them and how they’d most likely react. Would they be capable of making good decisions, or do you suspect they’d take their new vehicle for granted?
If you don’t feel like you can trust your child, it probably isn’t a good idea to buy them a car. Even if all of the financial variables are giving you the green light, you should wait a while for your child to mature and make them have some skin in the game.
Aim for the Best of Both Worlds
Whether or not you should buy your child a car may feel like a binary decision, but it doesn’t have to be. In fact, you can usually get the best of both worlds by finding a middle ground in which both parties are involved in the purchase process.
Remember, you primarily want to accomplish the following goals:
- Minimize the financial burden on you and your child.
- Get your child into an appropriate vehicle at the right time.
- Help your child to appreciate their car and grow from the experience.
It can be tough to check all those boxes when you or your child pay for their first car individually, but it’s much easier if you make the process a joint effort. Let’s review an example to demonstrate how you might go about that.
👉 For Example
Say your 18-year-old child has saved $5,000 over the years through summer jobs, babysitting, birthday gifts, and an allowance they get for their chores. They can’t afford a car, but you have them contribute $3,000 to the purchase and cosign the auto loan, which they’ll take over when they get a full-time job.
You also include them in the car selection process and explain the primary factors to consider, including safety, mileage, and maintenance costs. When it’s time to buy, you bring them along to impress upon them the significance of the transaction.
Finally, you talk with them about the risks of driving and the responsibility on their shoulders now. You promise them that this is the only car you’ll help them buy and explain how serious the consequences will be if they crash it, including the ones outside your control.
Ultimately, the question of “should parents buy their child a car” has no definitive right or wrong answer. If you consider all the variables we discussed and factor them into your approach, everyone should make it through all right.
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