ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How to Teach Your Teenager to Save for a Car

Updated on November 26, 2012

As the all-important 16th birthday rolls around, American parents are faced with a major dilemma - the purchase of a car. Many sons and daughters expect a car as a sweet sixteen gift - especially since the tradition has been perpetuated in movies, on television shows, and in songs.  That said, you do not have to buy your son or daughter a sweet sixteen car, and even if you want to, there is something to be said for encouraging him or her to save and pay for some or all of it.  

Below I will outline some ways you can encourage your child to save for a first car.  These guidelines are not just about saving you money; they are about establishing healthy financial habits from which your child will continue to benefit long after this car is gone.

Empowerment through Involvement

You may be compelled to make the car a big surprise that is unveiled on your kid's 16th birthday, but there are several downsides to doing so.  One of the biggest problems with surprise car gifts to children is that it gives them a skewed sense of reality - that items of great value can simply fall into their laps and are givens in life.  Your teen might also want to be involved in the purchase - and could stand to learn a lot from the intricacies of researching and negotiating the purchase of a car, be it new or used.

It is much better to involve your child with every step of the car purchasing process.  Allow him or her to discuss what kind of car he or she wants, whether it will be new or used, what safety features are important, and how the car will be purchased, insured, and maintained.  Later down the line when your kid is grown and needs to buy another car, all of the know-how collected for this first purchase will really come in handy!

Alternatives Through Agreements

When it comes to paying for the car, I recommend you opt out of paying for the whole thing, even if you can. Having your child assume some of the cost of the car allows him or her to understand the true value of a car and learn that owning a car is a privilege that must be earned.

Here are some potential agreements you might consider making:

  • Split the cost 50-50: Agree to pay for half of the car, but insist that your child pay for the other half with money that is earned through an after-school job or summer work
  • Require a certain number of hours of work: Agree to buy the car (if you have the means to do so) under the condition that your son or daughter take on part time work and direct all earnings toward a college fund
  • Loan your son or daughter the money for a car: But require repayment and interest - this can be a less risky way to teach your son or daughter about debt
When discussing these alternatives with your child, it is best to start early.  The younger a child is when you discuss these matters, the more amenable to the concept he or she will be as the date approaches.  
Starting this conversation early can also launch a very important dialogue about saving habits, bank accounts, debt, and financial goals that can benefit everyone in the family.  Being open, honest, and calm about finances can make the issue so much easier to address responsibly.

A Final Note

If you feel as though you are expected to purchase a car for your son or daughter, but do not have the means to do so without going into debt, STOP.  You do not need to buy a car, and doing so could not only hurt your own financial future, but also your ability to support your family in the future.

Ultimately, a car should only be purchased if you feel that you already have an adequate college fund set up for your child or children, and if your own financial future is in order.  You should never buy a luxury item for a child at the expense of your retirement fund.

When faced with the prospect of not getting a car with no strings attached, many teens will get churlish, if not downright enraged.  Try not to take it personally-  with a narrower view of the world, most kids cannot understand how much damage buying a car when one is not ready can do.  Teens are also liable to be 'difficult' anyway.  It's the hormones.  Nothing personal.

I hope I have inspired you to encourage your kid to assume more responsibility when saving for a car.  Not only do you stand to save considerable money yourself, but you also stand to teach your child valuable financial lessons that will last a lifetime.

working

This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://corp.maven.io/privacy-policy

Show Details
Necessary
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
Features
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Marketing
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Statistics
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)