Pay as you drive fee for my teen drivers

[99Saturn]

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.

I didn't mean to make it sound like you were turning a profit, was just basically trying to point out potential unforeseen consequences. Was guessing insurance might end up in the same relative ballpark as $200 a month but I am so out of touch with what it would cost for a teenager's insurance.

Next you'll have to think about how to deal when the current 16 year old and 14 year old are home for summer break and both need to drive to their jobs. Good luck I have a while before I have to think about stuff like this.

 

[PWMDMD]

I didn't mean to make it sound like you were turning a profit, was just basically trying to point out potential unforeseen consequences. Was guessing insurance might end up in the same relative ballpark as $200 a month but I am so out of touch with what it would cost for a teenager's insurance.

Next you'll have to think about how to deal when the current 16 year old and 14 year old are home for summer break and both need to drive to their jobs. Good luck I have a while before I have to think about stuff like this.

No worries. Just finished buying the car and will pick it up Tuesday after work. My comments:

1. Haven't said anything to the kids.

2. KIA is still offering 1.9% financing for 48 months.

3. I got the car for MSRP which in this market I think is pretty good.

4. I really liked the vehicle. TONS of headroom and space - I'm 6'5" and it has more headroom without a moonroof than my Tundra does with a moonroof. Really smooth drivetrain too and nicely weighted steering. The only option it has is the tech package which includes rear cross traffic alert, blindspot monitoring, lane change assist, and 16" wheels.

5. Adding this vehicle to our current policy and putting the 16-year-old as the primary driver added $700 per year to our policy with full coverage at USAA.

6. I drove my wife's RX 350 for the first time in a few months and she normally does 10,000 miles per year. The last oil change was on April 10, 2022 at 30,345 miles and today the car has 34,875 miles on it - so 4,500 miles in 2 months with him driving it.

 

[John105]

Smart. A college kid having a car at college is not a good idea in most cases.

This is what my dad believed. He said you should be hitting the books and chasing girls, you don’t need a car. I didn’t listen and got myself a Porsche 951. I still regret not getting the Fuchs wheels. Even then I had good credit I guess. Car was $31k. Since I could not afford it in reality, it was taken away 2 years later by the bank, and legal action. My dad believed in letting me learn everything the hard way.

At any rate, I guess I don’t understand how much parents do for their kids today. How about they saved $5000 so they use $1000 of it to get a car and save the other 4?

I see it all the time so it’s normal. Wife’s aunt got her a hybrid rav 4 brand new for her sophomore year at Northwestern. Why? It’s so easy to get around Evanston. Visit the Stephen Colbert museum it’s free every 3rd Sunday

 

[PWMDMD]

This is what my dad believed. He said you should be hitting the books and chasing girls, you don’t need a car. I didn’t listen and got myself a Porsche 951. I still regret not getting the Fuchs wheels. Even then I had good credit I guess. Car was $31k. Since I could not afford it in reality, it was taken away 2 years later by the bank, and legal action. My dad believed in letting me learn everything the hard way.

At any rate, I guess I don’t understand how much parents do for their kids today. How about they saved $5000 so they use $1000 of it to get a car and save the other 4?

I see it all the time so it’s normal. Wife’s aunt got her a hybrid rav 4 brand new for her sophomore year at Northwestern. Why? It’s so easy to get around Evanston. Visit the Stephen Colbert museum it’s free every 3rd Sunday

Yup...he's going away to college and I plan to drive the car myself until the now 15 year old has a license and needs it for work. Less miles on the Tundra and less money at the pump. It is MY car and I drive it every chance I can get.

 

[Dave Hess]

Kia Soul are nice for the money.

 

[SubieRubyRoo]

$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.

False economy. A daily-driven vehicle is NEVER an investment; it’s only an expense. Make them feel the pain of the expense so that they learn to be frugal; every dollar they save in their teens-20s-30s is $100+ towards their retirement if not spent, but invested instead.

I’ve made plenty of bad financial choices during that timeframe, and now in mid-40s I’m trying to close the gap… which would have been a surplus if I skipped all those frivolities that I thought I “had” to have in my 20s and 30s (multiple Mustangs, SHO’s, G8 GT, and speed parts for all of them, etc…).

OP, I’d say give the kids some input on how much they think they want to spend on a car (up to your limit, of course) and I would make them pay 75%+ of the car payment and insurance cost. I made my 17yo daughter buy her car outright, worked with my indie to bring everything to a “safe” level, and told her she can be on my insurance to save on rates but will cover 100% of her personal expenses. She’s going to learn how to change her own oil and trans fluid; if she wants to “splurge” on having a shop do it, fine, but she’ll have to budget for it. It will teach her that money does not grow on trees for the 99% of us, but I also will not let her fall on her face if there is some freak failure.

I figure it’s a fair trade since I am using disabled veteran benefits to make sure she can graduate from college without any student loans… which is already a much bigger gift than any econobox would ever be in her life.

 

[LDB]

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?

Rather than per month maybe go with per mile. Get a log book and let them log their driving. Then at the EOM calculate the amount due for that month. Gives them good experience keeping mileage records which could someday be required for their future employment. If they don't drive a lot one month they save some money. If they drive a lot more than normal one month they pay for it and learn a good lesson about how more driving costs more money.

 

[99Saturn]

Thread revival!

False economy. A daily-driven vehicle is NEVER an investment; it’s only an expense. Make them feel the pain of the expense so that they learn to be frugal; every dollar they save in their teens-20s-30s is $100+ towards their retirement if not spent, but invested instead.

I’ve made plenty of bad financial choices during that timeframe, and now in mid-40s I’m trying to close the gap… which would have been a surplus if I skipped all those frivolities that I thought I “had” to have in my 20s and 30s (multiple Mustangs, SHO’s, G8 GT, and speed parts for all of them, etc…).

False economy - huh? My point was at $200 a month its basically a (cheap) lease, yeah a daily driver is not an investment but pouring $200 a month in to leave with no daily driver at the end seemed a bit steep. Just my $.02 at the time.

Plenty of ways to teach the same lesson re retirement and savings. It's why I'm lucky and happy (with proper encouragement) I opened my Roth when I was 14 and have funded it fully most years since.

 

[alarmguy]

...

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?

((DARN IT)) I missed that this is an old thread

More than fair, your providing them with a car.
If they rather, they could buy their own and I mean that nicely said. They have options.

My kids always had good clean used cars and paid their own insurance.
It's truly up to the parents. We all have different ways of raising kids.

One thing I will say and its really not taken seriously by a lot of parents, maybe justly so as the odds of it happening are low.
The cars my kids had and of course their insurance was always exclusively in their names. God forbid a bad accident or someone gets hit or hurt by the car, you as the parent are blameless because you are not the owner of the vehicle. So whatever lawsuit against your child, the financial damage to them will be minimal because there are no assets to go after if the lawsuit rewards exceeds the insurance coverage.