Best Cars for Teens - Best First CarGood Cars for Teenagers - Safest Cars for Teens and Young DriversIs there a perfect first car for teens? Deciding on the best car for teenage drivers depends on who is doing the deciding — the teen or their parents. Teenagers and their parents tend to have different objectives and priorities when it comes to cars, although it's often not difficult for the two parties to come to a mutually agreeable decision, especially when each party is willing to compromise a little. In this article, we'll try to look at the subject of first cars from both points of view. What Teens
Want An automobile is a projection of a teen's personality, social status, sense of freedom, and desire for peer approval — as well as possibly serving a practical need for getting back and forth to school or job. What Parents
Want Teens who are expected to pay their own way may also place importance on many of the same factors as their parents. Cost is a
Factor An older car is generally going to cost less than a brand new model. However, older used cars will generally be less reliable, may develop unexpected repair expenses, have fewer safety features, and not be as attractive as a newer model. On the other hand, insurance cost and taxes can be less. Used cars are generally sold "as-is" without warranties. A brand new car can be more expensive — although not necessarily so (see below) — but will have the latest features and safety equipment, be under manufacturer's warranty for 3-5 years, be protected by lemon laws, and will have new-car reliability — and a new-car smell. Brand New Cars for Cheap - Last Year's Left Over Models Here's how it works— request free dealer price quotes on left over car models that dealers still have too many of. They desperately need to get rid of them and are willing to give large discounts to make them attractive to you. Manufacturers offer large incentives in the form of rebates and low-interest loans on these vehicles. You can get free price quotes on any new car from the following sources: Edmunds Be aware that when you fill out the form specifying a make and model, in most cases you will not be asked about which year model you are interested in. If you are interested in last year's model, you'll have to specify that when you actually talk to the responding dealers. Best First
Cars for Teenagers - Top Recommendations Just keep in mind that newer cars tend to have better safety equipment, better reliability, improved gas mileage, and, in some cases, lower insurance rates - because of improved safety and reliability. Some older cars have high insurance rates because they are more often stolen (for parts) than new models. Honda Accords from the early 1990s are a good example. Although most of the following recommendations are for smaller, less expensive vehicles, many teenagers prefer to drive larger vehicles such as SUVs and trucks. However, we don't recommend large SUVs for teens due to the higher skill level and experience required to control them in emergency situations, the high cost of operation, and expensive insurance. Even smaller SUVs such as the Ford Escape, Honda CR-V, Toyota RAV4, and the Nissan Xterra are much less stable than a conventional sedan or coupe. We'll list some of our top first-car recommendations below, listed in no particular order. These are certainly not all the cars that might meet the needs of teenage drivers and their parents, but are some of the most popular.
When Cost
is Not a Big Factor Some teens are fortune enough to have the money to consider luxury or near-luxury used car models for a first car. Some of our recommendations for cars in this category are the following:
Important
Safety Feature for Teen Cars A newer but less common feature, electronic stability control (ESC), helps prevent accidents and is expected to significantly reduce highway deaths. It particularly helps teens, who are understandably inexperienced in handling emergency maneuvers. Smart teens and parents will look for cars with an ESC system. Car makers use different names for this system. See this article on Wikipedia for a more detailed description of ESC and a list of manufacturers' names for it. Where to
Find Good Used Cars Cheap An excellent source of used cars online is UsedCars.com a well-respected used car buying service that has already worked out discounted prices with dealers across the country. You can search their listings by price and area code, as well as make, model, mileage, and other criteria. Prices are already discounted but you can probably do better with a little haggling. New Cars Can be Bargains in Tough Economy Online pricing services such as Yahoo! Autos
Also check dealer prices at Edmunds.com What to Watch
For in a Used Car Also get an AutoCheck®
Vehicle History Report Consider buying a certified used car, which offers some protection against surprise problems, at a somewhat higher cost. These are cars backed by a full inspection and warranty from the car manufacturer. Look for cars that have no more than average mileage. Fifteen thousand miles a year is considered average. A three year-old car with 45,000 miles would be average. Higher mileage cars pose a higher risk of problems. However, a car's actual condition, as determined by a mechanic's inspection, is more important than mileage numbers. Some cars with high mileage can be in great condition — and be great bargains. Teens and
Car Financing Many teens make the mistake of taking dealers' advice regarding financing and trade-in situations. For example, if the teen has a trade-in and is still paying on a loan, there's a good chance the loan is "upside down" which means the loan balance is more than the car is worth. A dealer will offer to "help" by rolling the negative loan balance into a new vehicle loan, instantly creating an even worse upside down situation — a cycle that is often repeated multiple times, making the problem worse at each turn of the cycle. This is a bad way for a teenager to begin a lifetime of buying cars. It can easily result in loan defaults and credit problems that will haunt them for years to come. See the First Car Guide web site for much more information and advice on teenagers, first cars, and automobile financing. The information on this web site is essential to teens buying a car for the first time. It covers a wide range of topics from picking the right car to finding insurance. Stay Away
from Problem Financing The most common method for teens under the age of 18 to get a car is to have their parents buy it for them, possibly with an informal family loan arrangement. The car must be in the parents' name, as must be registration, title, tags, and insurance. When the child becomes 18, the parents can "sell" the car to him/her to change ownership. If financing is involved, the teen could get a conventional car loan from a bank or credit union, although without a credit history, parents would have to co-sign. It's a great way for young adults to begin building credit for themselves. For those 18 years old and over, it is common for parents to co-sign for the young buyer on a conventional auto loan, assuming the teen has an income sufficient to repay the loan. Even though a parent co-signs, the car and loan are completely in the teen's name. See, Do I Need a Co-Signer? Unless it's the only option open to you, try to avoid "buy-here-pay-here" (BHPH) car dealers, who charge high interest rates and are very intolerant of late or missed payments. Much of their business is selling, repossessing, and reselling the same cars. See, Should I Buy from a Buy-Here-Pay-Here Dealer? Avoid extremely long-term loans that require little or no down payment. Even though lower payments in long term loans are appealing, interest rates are higher, overall financing cost is greater, and the loan is "upside down" for most of the loan term. Being "upside down" also means that selling or trading can be troublesome because the amount owed on the loan is greater than the value of the vehicle. It also causes great risk if the vehicle is stolen or totaled in an accident because insurance will only pay the market value of the vehicle, not the balance of the loan. Without GAP insurance, the loan balance is the responsibility of the borrower, which surprises unfortunate people every day. Avoid dealer offers to "pay off your old loan" in trade-in deals because the negative equity in the old loan will simply be added to the new loan, making the upside down situation even worse. Dealers don't reveal this fact. Inexperience is the worst enemy of first car buyers. It is easy to make mistakes and difficult to fix them. That is why it is so important for young car buyers to educate themselves, with web sites such as FirstCarGuide.com, before taking the first big step. Teens and
Credit - Bad Credit or No Credit Getting approved for
a loan and buying car insurance are based on credit scores, which
are determined by consumers' borrowing history. This information can often
be wrong or outdated. It's always wise to know your FICO®
credit score A poor credit score can result in very high interest rates, high insurance rates, high down payments, and even loan refusals. The recent downturn in the nation's economy has created tighter credit, making it much more important to have a good credit score than ever before. Where to get
Financing Teenagerss often get started in car financing by having a family member co-sign for them. This is the best way to get off to a good start and establish a good credit history for future financing. Teens should realize the importance of not overextending themselves financially and of making payments on time. A single late payment can result in credit score reductions that can take months, even years, to fix. A single repossession or loan default can be devastating. Such problems can cause financing difficulties for at least seven years into the future. Calculate
Loan Costs Teens often don't understand the basics of automobile financing and make large mistakes that are impossible to correct later. See, How Are Car Payments Calculated? Other Costs
of Car Ownership Teens and
Auto Insurance Therefore it is important to shop for the best rates while still getting coverage that is needed or legally required. Insurance rates vary widely between insurance companies. Many teens attempt to cut insurance expenses by buying only minimum state-required liability coverage, which normally means low limits. This may not be wise, given the risk of being responsible for very expensive medical and property damage in an at-fault accident. Policyholders can easily become subjects of lawsuits to recover expenses beyond those covered by minimum insurance. Most state auto insurance minimums are outdated and much too low. Find out how to select the right insurance company for teenagers in our article, Auto Insurance Companies - Best and Worst. Learn how to shop for companies that have the best discounts for teens. For example, some companies discount for good grades and driver's education courses, and others do not. Compare rate quotes from multiple auto insurance companies from online services such as NetQuote.com . The quotes are free and fast. This is the only way to know for sure what you'll have to pay. It's always best to get multiple quotes for comparison and best selection. NetQuote.com is the largest and oldest of such companies and works with over 100 different insurers to get the right insurance at the lowest rates for it's customers. Esurance.com is another car insurance broker who can get you fast rate quotes from multiple insurance providers. Since it's free, it's to your benefit to get as many quotes as possible. See First Car Guide for additional information and advice for new teen drivers choosing a first car and learning about the fundamentals of automobile buying, financing, and ownership responsibilities. It's a great resource that all teens should read. Also see Used Car Advisor for important tips on buying used cars.
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