THE BLOG

Teens and Cars Can Drive You Crazy

03/06/2013 06:31 pm ET | Updated May 06, 2013
  • Neale Godfrey Author, mother and Chairman of Children's Financial Network, Inc.

Just reading the words teens and cars in the same sentence probably sends you reaching for an antacid. Unfortunately, that queasy feeling is well founded. The privilege of driving is costly, and teen driving can be dangerous.

The first quiz for your teen on buying an automobile is short.

  1. What are all the different costs associated with buying a car, and how much are they?
  2. What are all the different costs associated with operating a car, and how much are they?

If your kid left out any of the costs on either of these lists, they are in for a rude shock when they go to buy a car -- an even bigger one if the purchase was already made.

You have to explain to your teen that the price on the "for sale" sign on that sweet car down the block is only the beginning. Just because they have saved up enough money to cover the price of the car doesn't mean they can afford to buy it (or drive it). Consider:

  • Sales tax
  • Registration fees
  • State inspection
  • The insurance premium
  • Gasoline
  • Maintenance
  • Extras

What is the exact price tag on all these items? Your teen has to research these. They'll vary from state to state -- insurance quotes, in particular, can vary quite a lot. Before your teen goes car shopping, make sure that he has done his homework and knows what all these figures are.

An alternative to your teen owning a car is driving the family car. Adding a teenager to your insurance policy can raise your premiums from 44 to 68 percent -- your kid must understand that they have to pay the extra cost on the policy.

Before you add your teen to your policy, talk to your agent -- with your teen present. When my son Rhett was approaching that age when all teen's thoughts turn to cars and driving, I took him on some very significant outings: insurance agent, auto-body repair shop and police headquarters. In advance of our visits, I had made it clear that I wanted my son to hear the consequences associated with teen driving -- I wanted them to be frank. This was my version of Scared Straight.

The insurance agent worked up a price quote showing how much more the insurance was going to cost. In addition to the increase in premiums, which was shocking enough, he also learned that in many states, even one accident or moving violation by a teenage driver can be cause for the insurance company to cancel your policy. The agent told us that taking and passing a driver training course, maintaining good grades and limiting your kid's driving to one designated car can possibly help control insurance cost.

The auto-body shop manager was great. He pointed out damaged cars on the lot and told us how much the repairs were going to cost. Even some minor-looking dings were surprisingly expensive to repair. He showed us a car that was not going to be repairable and made point of telling Rhett: "The guy driving that car was pretty banged up, but if he hadn't been wearing his seat belt he wouldn't be alive." He pointed his finger at Rhett and added, "Always wear your seat belt -- it could save your life."

Our visit with a community outreach police officer was frighteningly informative. Car crashes caused by teen drivers are the #1 killer of teens in the U.S. today. The officer didn't hold back as he described -- in graphic detail -- the dangers of speeding, driving under the influence of drugs or alcohol, cell phone use and peer pressure. He took us to the impound lot where he showed us a car that was so damaged I couldn't figure out what the make was or what color it had been. "Take a good look, son," he said to Rhett. "That's what happens if you drink and drive -- a family died in that car."

I suggest you make a very specific contract with your new driver that includes financial issues about operating a car, citizenship issues (like keeping good grades), and road-responsibility issues. Be sure to include both issues and consequences -- don't forget, driving is a privilege. You can download a sample contract from AAA by clicking on this link.

In preparation for this article, I asked Rhett -- now an adult -- about those visits to the agent, repair shop and police. I wondered if he remembered them as vividly as I. "Yeah," he said. "It was... sobering." He wanted to lighten the memory but I could see the return of the same look of fear that he had when he was 15. "I thought it was pretty heavy-handed to make me see and hear all that stuff. It was pretty rough." I gave him my "mom" look and he then offered -- "I'd do the same thing with my kids."

We'd like to hear your teen driving memory or tip in the space provided below.