Christian Financial Advice and Biblical Stewardship

When Should You Invest in Your Child's First Car?

  • Shane Barkley Author, Dad Cents
  • 2010 3 Sep
When Should You Invest in Your Child's First Car?

Some of you may read about a first car and think, "I don't know of any way my kids are going to be able to afford a car until they're out of the house!" This may be the case, but here's an example that will make this topic even more important to you. Let me explain:

Not long ago, I visited Poland to present a workshop at an International Fathering Forum, attended by fathers from Poland and quite a few neighboring countries. While I was there, I learned about quite a few societal differences between Poland and the United States, and one was a real eye-opener for me:  the average Polish kid doesn't get a car until he has finished his course study at the university and begun working full-time.

Even though I wrote this chapter for readers in America, where teenagers typically get their first car at 16 or 17 years old, I realized that even if people in our country took the same approach as Poland (and really most of Europe) in this way, there would still be great reasons for kids to learn about automobiles while they live at home. I shared with those fathers, kids need to learn about automobiles with the family car, not after they are out of the house. Parents need to teach their children about car ownership and upkeep, and not leave them to learn on their own! The Polish dads quickly understood and agreed. One even told me he was going to begin immediately with his two sons, teaching them how to change the oil in their car.

If you find yourself doubting that your kids will own a car while living at home, this advice still applies to you! Your kids need to learn all they can about your car. They need to know how to purchase insurance, tags and taxes, fill the car with gas, check the oil level and many other lessons that you need to teach them.

Get ready for any and every argument from your teenager about why he or she "needs" a car. Then, stay ready, because if you don't agree to that first request, it will surely be followed by another ... and another. Eventually, for whatever reasons, you'll start giving the idea some real consideration. It's a big decision that needs to be made carefully.

Below are eleven questions that you will want to think about, research, and pray about during this process—and you may have others you'll want to add to the list. Write down your thoughts and decisions about these:

1. Who will pay for the initial purchase of the car? 

2. Who will pay for the maintenance—oil, tires, windshield wiper blades, engine repairs, etc.?

3. Who will pay for the gas? I grew up writing down my mileage on the odometer, the date, gallons and cost at each fill-up in a small notebook kept in the car. This method helped tremendously in tracking the dollars spent on gas. Here's another related question: Are you willing to pay for gas if your child uses the car to run errands such as groceries?

4. Who will pay for the tags & taxes? This could be very important, depending upon the state where you live.

5. Who will pay for insurance? This is a huge consideration. Insurance premiums alone could help you decide the kind of car that you purchase. Adding a teenage driver to your insurance could raise your premiums by up to 200%, so make sure you check on good student discounts and what the stipulations are for that program. Another must when your kids begin to drive is to add an umbrella liability policy to your coverage. Their own safety is your biggest concern, but from an insurance perspective, the largest risk when your children begin to drive is the possibility of them injuring someone else. An umbrella policy will significantly reduce your risk, for only pennies on the dollar.

6. Who pays for violations—speeding, parking etc.?

7. Who pays for accidents?

8. Who is allowed to ride in the car, and how many at a time? What other activities are forbidden for your child while he/she is driving? (Listening to music? Talking on a cell phone? Eating and drinking?)

Some kind of restriction here is a must, and in some states the decision is already made for you. For example, in the state of Maryland, it's now illegal for someone under 18 to:

  • Get a ride to school with your friend.
  • Answer a phone call while driving.
  • Drive your date to the movies.
  • Check a text message while driving.
  • Be a designated driver.[i]

Make sure to check your state laws! Along with that, you know your child and what he can handle. Knowing how easily people are distracted by some of these things—and given the fact that your teen is an inexperienced driver—I would recommend being pretty strict on these in the beginning. You can always relax the rules later as your child demonstrates responsibility.

8. Who owns the car? This question is bigger than it may appear. Ownership of the car may be important in determining how your child views your ability to restrict or take away car privileges, where he can go, how long he can be away from home, and so on. In my view, these are significant responsibilities that need to be grown into.

9. What type of consequences will come into play if your teen is irresponsible with the car?

10. Are driving trips outside school, athletics and work subject to prior approval?

If you decide to pay for some or all of the car expenses, make sure you add a section to your budget just for the car. Also, discuss what happens if your child exceeds his budget in this area, and who is responsible.

I'm sure you know that cars are some of the bigger expenses in life. Between purchasing, gas, maintenance and insurance, they can take a huge chunk of the budget. Also, cars are depreciating assets; they cost you money! Rarely can you sell a car for more than you paid for it.

It's good to have a balanced perspective on the whole situation. Really, a car is a way to get from one place to another. I say this as a reformed "caraholic." In the past 19 years, I have owned 27 cars and trucks! To say that I am somewhat familiar with negotiating for a car and all of the other details is an understatement. Safety and reliability are worth something, but the basic purpose of a car is to transport you and/or your child from one place to another. Getting caught up in specific makes and models or extra features is usually not healthy for your budget.

Decisions made in this area of transportation can make a significant impact on your children's future. And your modeling will be crucial in molding your child's view.

September 3, 2010

[i] Maryland Legal Assistance Network. "How Changes in Maryland Law Affect Minor drivers." <>, 31 August 2007.

Shane has a passion for teaching dads how to intigrate Biblical financial values into their children's lives. Shane has a degree in Business Administration from John Brown University and has 10 years experience in the financial consulting industry. He currently serves as the President of Dad the Family Shepherd. Shane and wife, Valerie, live in Topeka, Kansas with their three daughters.