Buying A Car
As a teen it’s more difficult to buy a car, since we don’t have an established credit history and will have difficulty finding someone to lend us the money without a credit history (see Credit History & Credit Score (FICO). If you’re paying for the car, or part of it, be realistic about where you will get the money each month and how much you really can afford. Once you come up with a figure, save an additional 10-15% for inflation, increases in gas or car insurance and unexpected events. Worse comes to worst, you will have extra money available to spend, or pay off the car early.
Basic Car Buying Rule
If you can’t afford to put down at least 20% on the car, you’ll probably end up owing more on it than it’s worth. If you can’t afford to put down 20%, DON’T BUY IT! If you can’t pay off the car in 48 months, DON’T BUY IT! Instead, buy a less expensive vehicle that you CAN afford. Remember—the purchase of the car is only the beginning of your expense items.
- Gas and Maintenance: These prices will probably differ based on where you live. Make sure you can afford all the expenses that go with owning and driving a car. Rule of Thumb: add at least $225 for gas and maintenance per month (Hybrids are cheaper!). Again, if you can’t afford to properly maintain your desired vehicle, get a less expensive one!
- Use the gas the manufacturer recommends, not a higher or lower octane.
- Take good care of your car. Follow the maintenance schedule from your car manufacturer.
- Change the oil every 3,000 miles. At the same time, have the garage check all fluids in your car.
- Check your tires often to make sure they have the proper amount of air (varies based on the type of car and tire manufacturer). This can affect your gas mileage, ride and, most important, safety.
- Look for tread wear on your tires. One quick way to check is to take a penny and insert it head first into several tread grooves. If you see the top of Lincoln’s head, your treads are worn and your tires need to be replaced. Check all of them. Make sure the four tires are the same make and model. If you want to upgrade or change the make and model, change them all.
- Align and balance your tires every 12,000 miles.
- Rotate your tires every 6,000 miles.
- Insurance: Your parent’s insurance will likely double (if they have only one car) when you turn an age where you can drive without an adult in the vehicle. This age varies in each state. This is true whether or not you own your own car. If you are the primary driver for a vehicle and whether you own it or not, your rates will go up even higher. If you do own it, the insurance will be sky high. You need insurance if you have a license. Always carry car insurance even if your state does not require it—your liability if you have an accident is just too great! Once you start driving, if you don’t have any tickets or accidents after three years, you rates should start to go down. If you are a teen and still in high school, insurance can be particularly high. Shop around for the best rate. Many times you can pay a little less for insurance if you have taken a formal driving course and/or have good grades (honor roll). The safer the car, the better the rates. Most four-door models are less expensive than two-doors. If a car has LoJack, a car security system, it will also reduce your rate. Insurance rates depend on where you live. You might also get a break if your car is parked in a garage. How much you drive and your annual mileage will also factor in on your insurance rate. Although it is not fair, just being a teen will affect your rates the most.
Every state's insurance regulations are different, so find out what your state mandates. Realize that what the state mandates is a minimum most experts recommend more. There are many parts to car insurances (liability, collision coverage, comprehensive coverage, gap insurance etc.), so speak to an expert.
Quck Tips on reducing your insurance:
- Look For A Good Student Discount
- Keep a Clean Driving Record
- Raise Deductible
- Older Cars have lower insurance rates
- Shop around for the best policy
The biggest factor in your insurance rate is of course your safety record, and that of your vehicle. The obvious rules help keep you out of accidents:
- Don’t talk on a cell phone.
- Don’t text messages while you drive.
- Concentrate on the road, not your friends or music.
- Let someone else change the channels or the temperature, unless you are at a stop sign or parked.
- Wear seatbelts—make sure your passengers do too!
- Leave plenty of room between you and another vehicle.
- Use your signals.
- Be especially careful in bad weather.
- Obviously don’t drink or use drugs when driving.
- Don’t speed.
- Obey the rules for your age and driving license type. Like if you are in a state like mine, only one non-relative can be in the car until you are 18.
Sorry, but I had to mention the above items in order to provide you with a complete picture.
- Other Expenses: Remember to save some money for other related vehicle expenses. This might be for parking fees, tolls, car washes, and getting or renewing your license and registration.