Pay as you drive fee for my teen drivers

Joined
Apr 22, 2018
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Location
MA
Here's my situation: I have a 16-year-old, a 14-year-old, and a 12-year-old. The 16-year-old is the only current driver but he's a senior this year and will be leaving for school in about 14 months. At that point, the 14-year-old will be close to getting his license. My wife wants her Lexus back, so I'm thinking about a 2022 Kia Soul LX for the kids. Normally, I would only consider a low-mileage used car but honestly, there isn't much difference in price in this market. I made the 16-year-old save $5K for a downpayment but he's only going to use it for a little over a year and then the middle kid will use it so I'm thinking:

1. Tell him to keep his money - good job working and learning how to save for something - he's currently working two jobs this summer - great!
2. You can get one for about $22k - put $10K down and finance $10K for 4 years @ 2.75%. I could pay for in cash but have some large house renovations coming up and want to keep a little more liquidity than normal with all that's going on in the world.
3. My wife and I cover repayment, insurance, and maintenance (it's still our car) but anyone who wants to drive it regularly pays for their own gas and a flat $200.00 per month fee (or some number - haven't really thought about this number) to help offset expenses. This way the oldest only pays the $200 per month until he goes to school and then the middle kid will have to get a job and pay the $200 when he's ready to drive and so on.

I want anyone driving the vehicle to have some "skin in the game" but I want to be fair and I think a "pay as you drive fee" seems fair. Does that seem fair to everyone?
 
Seems like with the chance for conflict, the “It’s my car and I’ll decide who gets to use it on what terms” is a good position for you to be in.

Lay out a contract and have each driver sign and understand the terms.
 
I like the concept. Nothing in life is free, nothing. I'm not sure about the $200/mo, instead have them keep track of their miles and charge per mile. It incents them to not drive around willy-nilly and also preserves their cash if they don't drive much. This also avoids the complexity of how much gas should they add when others are driving the car.
 
Seems like with the chance for conflict, the “It’s my car and I’ll decide who gets to use it on what terms” is a good position for you to be in.

Lay out a contract and have each driver sign and understand the terms.
Good idea! My wife and I run what we call a "Benevolent co-Dictatorship" and it will be made absolutely clear this car belongs to my wife and me, and we in our benevolence are kindly allowing our kids to use OUR car. ;)
 
I'm not sure about the $200/mo, instead have them keep track of their miles and charge per mile. It incents them to not drive around willy-nilly and also preserves their cash if they don't drive much. This also avoids the complexity of how much gas should they add when others are driving the car.
Good point! Although there will be very little overlap between the 16 and 14-year-old. When the oldest goes to school he will not have a car on campus. Still, something to think about...thank you!
 
I'm reading about the Kia Soul - seems like it gets good reviews. My kids are tall and it seems like interior space is plentiful while still being one of the least expensive new vehicles you can buy today. Not too powerful and good gas mileage. I have to get the 16-year-old out of 300hp vehicle getting 19mpg. I've read some threads on here already but if anyone wants to chime in about the Kia Soul please share your opinion.
 
I'm reading about the Kia Soul - seems like it gets good reviews. My kids are tall and it seems like interior space is plentiful while still being one of the least expensive new vehicles you can buy today. Not too powerful and good gas mileage. I have to get the 16-year-old out of 300hp vehicle getting 19mpg. I've read some threads on here already but if anyone wants to chime in about the Kia Soul please share your opinion.
@skyactiv. Dislikes them...
 
$200 a month seems steep to me. The payment under what you laid out above ($10K financed at 2.75% over 4 years) is around $220/month right? Any chance it is going to leave your 16 year old wondering why he has not just been paying towards his car rather than effectively leasing a car? Same question for the next two kids.

What's the insurance bill for the 16 year old on the car? Might be worth having him cover the insurance to put skin in the game. Maybe maintenance too.
 
$200 a month seems steep to me. The payment under what you laid out above ($10K financed at 2.75% over 4 years) is around $220/month right? Any chance it is going to leave your 16 year old wondering why he has not just been paying towards his car rather than effectively leasing a car? Same question for the next two kids.
Seems valid--and if anything, I'd think it nice if the kid figured that out for themselves. I mean, once they wake up and realize they have been renting instead of owning (or paying along the way to ownership), maybe they'll learn something. Bit of incentive to move one when they can.

That said, at their age I'd think it'd rather hard to qualify for any sort of a loan, so in reality, this is still a major help to them.
 
How y'all communicate has everything to do with execution of such plans.....so keep it plain, simple and clear. Include "esthetic" considerations like , "no eating in the communal car, period". My friends in the country accept this rule as common necessity. Food bits bring mice, period. Just eat and drink outside the car....no big deal. There can't be any discussion on this one for example.

Because I'm a fan of keeping mileage etc., I believe a mileage based fee is clear and very 'on-point'. It's also educational; being something which will come down the pike in many different forms. Numbers are easy as there are only 10 of them (ha-ha). There's nothing wrong with kids knowing how much something costs.

Also, tell them about my friend who, via a DWI, incurred insurance premium increases so high that he and his wife (who almost divorced him due to the supreme bone-headedness of his incident) could only afford one vehicle and it needed to be larger to handle towing. They have to drive this Sherman tank anywhere they go. They had always had a small car in the garage....no more.

One more consideration: The lady who bought my brother's 1993 Volvo 240 did so after her son was hit at a red light while driving their own 240. Momma liked the safety as Sonny boy walked away from a wreck. Also, the snap and handling of a hot Pontiac loaner car was so enticing both were stomping on the go pedal. Momma realized this and wanted the slow, underpowered (a term I detest) bank vault replaced.

Make it a basic car. The cost of a hotter, newer, fancier vehicle can be expressed in multiples of the communal car's per mile cost.

Tell 'em all that the tech within cars is changing so fast that sharing this car is smart as their future vehicle purchase decision will be months/years off when "what they want" will likely be radically different from today's vehicles. They don't want to be paying off a loan on yesterday's technology.
 
My niece asked If she could borrow money for her last semester of college. She worked and paid her way through most of her education. I lent her the money and every monthly payment was on time. When she paid the whole amount back I gave her a check for the whole amount. My parents did the same kind of thing for me , made me pay rent but put the money in the bank stock market then later gave it back.
 
My niece asked If she could borrow money for her last semester of college. She worked and paid her way through most of her education. I lent her the money and every monthly payment was on time. When she paid the whole amount back I gave her a check for the whole amount. My parents did the same kind of thing for me , made me pay rent but put the money in the bank stock market then later gave it back.
I would like the same deal...
Good on her and you.
 
$200 a month seems steep to me. The payment under what you laid out above ($10K financed at 2.75% over 4 years) is around $220/month right? Any chance it is going to leave your 16 year old wondering why he has not just been paying towards his car rather than effectively leasing a car? Same question for the next two kids.

What's the insurance bill for the 16 year old on the car? Might be worth having him cover the insurance to put skin in the game. Maybe maintenance too.
It was just a number. We just want it to "hurt" a little bit so the kids take care of the car and not we are not trying to make a profit off them. My wife and I will have to think about this number.
 
My niece asked If she could borrow money for her last semester of college. She worked and paid her way through most of her education. I lent her the money and every monthly payment was on time. When she paid the whole amount back I gave her a check for the whole amount. My parents did the same kind of thing for me , made me pay rent but put the money in the bank stock market then later gave it back.
My niece asked me to help her with college and as difficult as it was she was not a "good credit risk" and I said no. It was hard because I was in a position to help and my sister had passed away but my nieces was and is a mess. She went to a private university that she really couldn't afford to ultimately have a job that doesn't pay well. I have 11 years of higher education all at public universities at a greatly reduced cost. I'm currently enrolled in an MBA program at UMass Amherst because it is my state school. I told her before she started that she was making a mistake, especially considering she wanted to go into social work. Her grandfather on the other side co-signed a loan for her and three years later she defaulted and now their relationship is very strained. I could see that coming from a million miles away.
 
Has he started driving yet?

Do you need him to run errands, particularly, driving his siblings around?

Might be better off "leasing" it to him for $30/night for "date night." Keeping track of gas, when he's using "his" gas working for you, gets complicated. Of your options, I like #3, but give him a free tank of gas per (time interval) to cover his running errands for you, and the rest is on him.

I have no easy answers, but am coming up on the same scenario. Luckily I scored the ultimate learner car, a 1999 camry, with its good sight lines and lack of rearview cameras. The used car market is bonkers.
 
The $5k he has now should be enough to buy a decent car now, even with this used car market. He might even be able to get a car for half that, if he isn't picky :unsure:
Or he can use that as "spending money" in college. He's a funny kid - he wants a car to drive now while he's here but has no desire to take care of anything after he goes to school. We also don't have a ton of room in the driveway and so really trying to come up with something that will provide for all three kids without having a bunch of cars parked out there. Just as one goes off to school the next one will start driving this car. When they're at school and not driving it then nothing is owed.

Thank you everyone for the feedback!
 
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