First Car

By Alexis Soohoo

August 7, 2019 5 min read

As teenagers of Generation Z approach driving age, car shopping is a likely conversation topic around the dinner table. Just like millennials, Gen Zers tend to not jump at the chance to get their license right at 16; their habits and priorities may differ from those of their parents, given considerations like future student debt. But Matthew Rocco from Fox Business reports that 72% of Gen Z members "would give up social media for a year to have a car." Whatever their priorities may be, knowing the ins and outs of buying your child's first car will help you buy smart and safe.

Financial literacy is not a common skill set among teens. When buying a car, parents should mostly be in the driver's seat to make smart decisions but also teach their children. It can be challenging for teenagers to realize that bills and debt will linger no matter the year, or the implications of that. The smartest but most financially straining way to buy your teen a car is to pay for it in full. The vehicle will remain in your name at least until your child is 18. Alternatively, you can use this as a parenting opportunity and cosign the loan with your teen. Just remember that missed payments can still affect your credit and your debt-to-income ratio. In addition, insurance increases can be a nightmare. A 2017 study by InsuranceQuotes.com reveals that a family's annual premium goes up by 78% when a teen driver is added. With all these financial details, it's up to each family to devise the best purchase strategy and use it as a teaching moment.

When it comes to car choice, things have certainly changed since the days when a parent's mindset was "the bigger and cheaper the better," the idea being that a larger vehicle would better protect the driver. Parents may be inclined to purchase an older vehicle, something comparable to the trusty 1998 Volvo that received a five-star crash rating. But rather than size, 77% of independent Gen Z car purchasers consider cost the most important factor. And car brand is only important to 23% of Gen Zers compared with 34% of millennials. Fortunately, the advancement and proliferation of new technologies make safety features and seemingly luxury features available in new models for less.

In addition to protecting in a car crash, new cars increasingly come with capabilities to avoid crashes altogether. The federal government requires that all cars under 10,000 pounds made after 2012 have electronic stability control, a lifesaving feature that automatically applies brakes to individual wheels in order to help the driver maintain control. Many base models also include collision-warning systems, rear backup cameras and blind spot monitoring. You can't put a price on safety, so these options are valuable, especially if they cost little to no additional cash.

You might not want to forget your teenage impulses when choosing your child's car. Consumer Reports warns that the more people a young driver has in the car, the more distracted he or she will be. So while your child may want a sports car with wild acceleration, the allure of an improved peer image can result in racing and other dangerous activities. Mobile devices are another dangerous distraction. Take into account practical features like Bluetooth that will keep your child from missing out while ensuring his or her safety.

Plenty of car safety features are available with a simple download from the App Store. Chevrolet's teen driver features provide audible and visual warnings when the car is traveling over speeds predetermined by parental controls. Ford's MyKey feature helps parents moderate some of their teen's behaviors the teen otherwise wouldn't want them to see, and it has helped teenagers become better drivers. Phone apps like Life360 also include features to track your child's driving speed and car battery. These features and others are a tech luxury without the extra cost that comes with built-in vehicle technologies.

With all the new developments that make teen driving a safer experience for all, it's also true that good parenting never goes out of style. By having your child chip in with insurance and registration fees, and pay for gas, tolls, parking and maintenance, he or she will be gently led into the realities of adulthood, learning accountability and responsibility. While buying a first car can be scary, with a plethora of research and a clear goal in mind, this coming-of-age tradition can be an enjoyable bonding experience for everyone involved.

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