Sooooo its time to buy a car for my teenager. Do I go with a used or new car? And why?

(Note: We are both paying half and half)

How is your states car insurance rates.....

Call a few companies up and see what they will charge you for a new car vs a used one to add your teenager.

Car insurance companies love new drivers because they can really charge you a lot of money to insure them.

Toyota, Honda, and BMW are a few of the companies that make very good cars, which you could pick up a used one for almost half price. I bought a used BMW with 120,000 miles on it for $12,000. So instead of paying $30,-$40,000 for a new car. I got a big discount, and still get all the safety features of the car. (PS its still going today with 219,500 miles) and no car payment.

We all would like a new car but accidents happen, both our faults and other drivers.

It hurts to sink a lot of money into a car then have it ruined.

Your smart for splitting the cost of the car so at least your teenager will take better car of the car.

So check car insurance first.... see if a new car or a used one will get you a better deal today, AND SAVE MONEY later on.

You could then take that saved money (for buying a used car ) and invest it in a Roth IRA account for your teenager, and that $2,000-$6,000 saved today, will help them retire REALLY RICH.... compounding yearly for 48 years.... tax free....

retire at 65 with one $4,000 dollar deposit at age 17 to a good mutual fund...
@ 5% = $41,605
@ 10% = $388,069
@ 15% = $3,277,603

http://www.dinkytown.net/java/RothIRA.html


Smart decisions happen now... Cars are only for driving.


PS if they waited to make one deposit at at age 27... that @ 15% = $3,277,603 would only be $810,173.

I would drive the used car today... not having to worry about wear and tear or chipping paint and minor fender benders. Save the extra $4,000k today. Then after college get the new car if you really need it. (but its cheaper to buy a used car)

I'd save the money for a new driver and go used. Statistically the chances for a collision are much higher. My state charges outragous rates for insurance for driver's with less that five years of having a license and now can't discriminate on age but can charge a person the high risk rate at any age if they waited to get a license till any age. It's a big difference here and they do rate the cars and rates will change on the type of car too, T
Tom Greenleaf - MetroWest Boston - USA
http://www.acsource.com/

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http://www.autoacsystems.com/tomgreenleaf/