Lesson 3: Manage Driving Expenses With Your Teen
Driving is exciting for teens, but eventually that excitement turns to worry as they wonder how to handle the costs that come with it. Insurance, fuel and car payments can really add up, not to mention the potential costs of traffic tickets and maintenance. In short, driving is not cheap, but a simple discussion of these costs now can let your teen know what to expect and help avoid confusion down the road.
The first and biggest issue to tackle is the car itself. Here are some questions to consider:
Many of these same questions apply to fuel costs. Depending on how much your teen plans to drive and the vehicle’s fuel economy, these costs can vary quite a bit. Make sure your teen considers fuel costs carefully when planning to drive and understands how the prices may change from day to day.
Insurance payments and maintenance costs can have a big impact on your teen’s – and the family’s – finances. You’ll need to discuss:
Once you discuss these decisions, you can address them in your New Driver Deal so that both you and your teen agree on who is responsible for them. Depending on the insurance company you choose, your teen may be able to help lower these costs. Some insurers, for example, may offer discounts for safe driving or even good grades in school. Talk this through and be prepared to revisit them later on if any of these costs change.
Talk: Many teens – even those with part-time jobs – may not have much experience paying bills and can be caught off guard by these sudden expenses. Talk through these bills with your teen so he or she understands the costs of driving, and try to be understanding when it comes to your teen’s finances. Review available options for limiting these costs, like potential insurance discounts, so your teen sees how his or her habits can affect them, and be sure your final decisions make financial sense for everyone.