The purchase of a first car is often a memorable event in a person’s life, but with automobile prices on the rise, few teenagers can afford one. Is this the right moment for Mom or Dad to step in and stump up the cash to help their child buy their first car?
The pros and cons
As the purchase of a vehicle is not only a big expense but almost a rite of passage, this seemingly simple question has other implications. Do parents want their child to have every opportunity? Yes, naturally. Do parents want their child to understand the value of money and realize that just because a person ‘wants’ does not mean they automatically ‘get’? Yes, again.
By helping a child buy their first car, the parent will have influence over the type of vehicle the child ultimately buys. Saying no to the flashy sports car and yes to the more sensible runabout offers greater safety on the road. A parent will be able to guide the child in regards to the value of the car and knowing what questions to ask the seller to ensure that it is a good buy.
Moving on to the cons. Providing the money to buy a car, whether brand new or used, encourages a child to think that they will never need to save their own money to make important purchases and that Mom and Dad will always be there to buy them what they want. Then there is the car as a birthday present scenario. This is acceptable providing the child realizes that such a gift is a one-time-only event, and that future birthday presents are going to be on a much smaller scale.
Parents could encourage young adults to purchase the car themselves using auto loans, helping them understand responsibility and the importance of paying it back. This would be a good option for children of a college age, teaching them sensible money management.
So how can a parent help out with a car without paying for the car? The first way is with advice, whether it is on the type of car a child should opt for or teaching the child how to save for the purchase. A parent could also promise to match the amount that the child has saved thus far, thereby encouraging the child to save while helping provide the funds to buy a better car than they could achieve on their own. If a parent does not want to help out with the finances for a car, then they may consider helping out with the insurance, which is likely to be hefty considering their child’s age. They may even offer to pay for gas and garage bills.
Whether a parent should pay for a vehicle for their child is a matter for them to decide, but it may be better for the child in the long-term if the parent devolves at least some of the financial responsibility onto their young shoulders.
