Planning to buy a car for your teenager? As a parent, your top concerns would most likely revolve around keeping the cost low and at the same time ensuring the car is safe for your child to drive.
New or used car?
This will be the first decision you’ll have to make – Whether to get a new or used car. Be prepared to entertain a debate with your child on this topic! It is not necessary to get a new car, although it does have benefits such as lower chances of breakdowns, more comprehensive insurance cover etc. However, used cars can help you save big on the initial investment. If you understand the UAE pre-owned car market and know what to look for, you could get a great inexpensive car. Even if the used car breaks down for some reason, your child will be able to learn how to solve the problem and what to do in such a situation. Extra points for hands-on learning!
How to finance it?
This would be the next question on your mind – How are you going to finance the car? If you are buying a new car, you can simply approach a bank to get a car loan. In most cases, 20% of your car’s value is required to be paid to the bank as down payment, upon which you will be able to get a loan for a maximum period of five years. In case you’re buying a used car, you have the option of paying in cash if you have sufficient funds, thereby avoiding interest payments, or you can get a used car loan from a bank. Keep in mind that interest rates for used car loans are usually slightly higher compared to new car loans.
Consider other expenses
You must also remember that there are operating costs involved after buying the car. In order to keep it running in good condition, the costs of regular servicing/maintenance, good fuel economy and spare parts among others, should also be considered. If you give your teen a car with poor fuel economy, they won’t be able to save money driving it, even if they try to. A car in good running condition and with average or good fuel economy can also teach your teen valuable lessons in budgeting.
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Don’t forget about car insurance!
If you as a parent want to register the car under your name, and with the insurance policy being under your name too, it may not be the best option to allow your teen to drive it around. Having a valid driving license doesn’t mean a child can drive their parent’s car. This is mainly because in case of an accident the insurance company will not accept any claim if it is not made by the person who’s name is on the policy. This means the parent will have to pay for all damages. To avoid this, an additional driver can be added to the insurance policy which will allow your teen to drive, and at the same time cover all damages mentioned in the policy.
This can come into play in case you are giving your old car to your teen. However, it is best to have the car registered and insured under the driver’s name.