Schwab MoneyWise ®
Schwab MoneyWise®

Your Teen's First Car

A lesson in freedom and finance.

Our Two Cents

Help your teen understand that buying the actual car is just the first step. Ongoing financial obligations begin once the purchase is made.

Buying a first car isn't just about money; it's also about the freedom to go where you want, when you want. Of course, this freedom isn’t free and requires a lot of financial planning.

A car is often the first major purchase a person makes, and it's the main savings goal for many teenagers. So it's important that both you and your teen know what you're getting into before anyone starts test-driving.

Three ways to help your teen buy a first car

Buying a car can be overwhelming for anyone, no matter how old—or young—you are. Here are ways to make the process easier and the outcome more rewarding for both you and your teen.

  1. Help your teenager throughout the process. Plan, investigate, negotiate, and even test-drive together.
  2. Encourage your teen to do a lot of research before heading to the dealership. Read reviews online and comparison shop.
  3. Have them do the math to get an estimate of what the price of insurance, gas, and maintenance might be. A car costs much more than just monthly loan payments.

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