Expect your car insurance rates to skyrocket once your child is added to your policy.


"My own car." That's the Declaration of Independence in three words for many young adults. Like other first freedoms, this one is hard-won for kids, and hard work for parents.

If your son or daughter is going to end up with a car at home, you have a great opportunity to teach strong lessons about values, responsibility, budgeting and other skills. Don't be skittish if you're not up to speed on autos. There are plenty of Web sites and publications to guide you toward the best choices.

Before you buy or lease a car for your child, consider taking the following steps:

1. Set priorities. How important is a car? Sometimes a hard look at the costs and benefits reveals that a car is unnecessary -- and perhaps unaffordable. At other times, jobs or school make a teen's car almost a necessity.

2. Discuss finances. Who will pay how much for what? Do you feel it's important for your children to assume some or all of the financial responsibility for buying their cars? And if you'll be footing part of the bill, how have you adjusted your budget to allow for the extra expense?

3. Budget for increased car insurance rates. Your premiums will jump anywhere from 35 percent to 125 percent (!) when you add a 16-year-old girl to your policy, and from 100 percent to 190 percent (!!) when you add a 16-year-old boy to your policy, according to the Insurance Information Institute. And that's just for the teen driver, not for a teen's car.

4. Figure out expected costs. You'll also spend at least $12,000 to $15,000 for a small car. Manufacturers offer discounts -- $400 is typical -- for first-time buyers, and often offer additional discounts of up to $1,000 to help them sell enough small cars to meet federal fuel-economy standards. But few folks have that kind of budget for a teen's car. So you'll probably shop for a used vehicle.

5. Shop around. Check out Consumer Reports magazine for a review of the best new and used cars. Scan newspaper ads and car-shopper publications for typical asking prices. Call used-car managers at dealerships to see what they'd pay wholesale for a car like you want. If you can come close to that, you've cut a great deal.

Libraries have "blue books" of used-car values, but prices are general, so use them as rough guides only. Or you can use online price guides for new and used cars, such as Edmund's and Kelley Blue Book.

Don't necessarily be scared of high mileage. Cars tend to last longer nowadays. But do spend $50 or $100 to have a mechanic check out a used car and estimate the cost of any repairs that might be needed.

6. Spell out driving rules. Safety is probably your first concern: Teens are involved in four times as many crashes per million miles driven as other drivers, according to the Insurance Institute for Highway Safety, and more of them are caused by driver error than alcohol.

Safety is mainly a factor of the driver, not the car, so the IIHS doesn't necessarily advocate bigger cars for young drivers. Instead, it favors gradually reducing driving restrictions for teens, rather than tossing the keys and turning your back. A curfew is a good idea -- 43 percent of teen traffic deaths occur between 9:00 p.m. and 6:00 a.m.

7. Stay involved. When teenagers start to drive, they test your resources -- both emotional and financial. So take control of them in advance, instead of having the process foisted on you by default. For example, pass along driving tips to your kids whenever you're in the car together. You might even want to have them get their hands a little dirty and check the car over when you stop for gas so they'll know how it works. With luck and planning, you'll feel glad for these chances to be involved.


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