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New or Used First Car – What Vehicle Should Parents Buy for Their Teens?


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A driver’s license is one of the first rites of passage marking a teenager’s path to independence. Most of us can clearly remember our first car — and that first year of freedom on the road. Along with the fun memories, many of us can recall cringe-worthy moments that look much different in the rearview mirror of parenthood.

And now, with a new driver on your hands, you find yourself weighing the pros and cons — and dollars and cents — of whether your teen should have their own car and whether that vehicle should be new or used. It’s a big decision.

Whether you are leaning toward a brand-new hatchback, a used sedan, or permission to borrow the family SUV — there are several important factors to consider for your teen’s safety and the family budget.

Should Your Teen Have Their Own New or Used Car?

Before deciding whether to buy used or new, it pays to consider whether it even makes sense for your teen to have a car to call their own. Making that decision comes down to two factors: risk and practicality.

Risk

According to the Centers for Disease Control and Prevention, teens’ risk of having a car crash is highest immediately after getting their license, during those first months of unsupervised driving. Their crash risk remains elevated for the next two to three years.

In fact, the fatal crash rate per mile driven for 16-year-olds and 17-year-olds is nearly three times higher than for drivers aged 20 and older. This high crash rate makes motor vehicle crashes the No. 1 cause of death for teens in the United States.

Passing the driver’s test doesn’t necessarily mean they’re ready to have unfettered access to their own car. According to a 2011 study published in the journal Traffic Injury Prevention, teens who have their own vehicles are much more likely to crash and use cellphones while driving.

From a safety standpoint, these researchers concluded teenagers should share the family vehicle for at least the first year or two of driving. When a teen has to ask to use the car, it creates a natural opportunity to remind them to buckle up and leave the cellphone alone. It also ensures they have to tell you where they’re going, with whom, and what time they’ll be home.

Once you decide it makes sense for your teen to have a car, establishing clear ground rules is an essential safety move. So is following through on the consequences of breaking them.

Authorities like the American Academy of Pediatrics, National Highway Traffic Safety Administration (NHTSA), and Governors Highway Safety Association universally recommend a parent-teen contract that lets families set rules, then gradually increase privileges as novice drivers gain more experience and show responsibility.

For example, experts recommend no friends in the car for the first few months of driving, sticking to low-speed local roads, and only driving during the daytime until they have enough adult-supervised practice on more challenging roadways and at night.

Identify areas where your kid needs to develop more skill and experience and continue to take them on practice drives. As you become confident in your child’s proficiency in driving with passengers, at night, and on highways, you can phase in more solo driving with friends, after dark, and to new locations.

As much as possible, limit their driving during hazardous weather conditions. Ensure your teenager gets lots of supervised practice driving in fog, snow, ice, or heavy rain to ensure they’re prepared if they’re caught in an unexpected storm. This parent-supervised practice can continue long after they have their driver’s license.

Some rules should be evergreen, like a zero-tolerance policy for impaired driving, seat belt use, and no texting or talking on the phone while driving.

You know your teen best and can adapt the driving plan based on their maturity, responsibility, and skill on the road. But according to a 2010 analysis published in the Journal of Adolescent Health, the human brain is still developing well into a person’s mid-20s. And during the teen years, there’s an increase in peer social influence and risk-taking along with potentially poor judgment.

In adolescence, it is kids’ biological job to explore their world and test out its boundaries. Start them out with strict rules that ease up over time rather than turning over the keys carte blanche the day they get their license. A gradual approach allows them to gain the experience they need under safer circumstances.


Practicality

Getting your teenager a car might be the right choice for your family if it would solve significant family logistical problems.

For example, if the family car isn’t available to share when your teen needs it to get to work or extracurricular activities, they may need their own wheels. Or perhaps you need your teen’s help to run family errands like grocery shopping, checking on grandparents, or driving younger kids to and from school or activities.

If you think your teen needs their own car for practical reasons, start planning early. Ensure they have had hundreds of supervised driving practice hours and that you’re comfortable with their level of maturity. Talk early and often about the rules and expectations around where, when, and with whom they can drive.

Outline all the costs of buying and maintaining a car as early as a year or two before their driver’s test. Giving your teen responsibility for car payments, insurance premiums, maintenance, or gas money teaches valuable personal finance skills. It also gives them a vested interest in taking good care of the car.

If you plan to help offset the cost of their first car, clearly discuss which expenses you’ll each cover. For example, you agree to cover a percentage of the car payment while your kid handles car insurance, gas, tolls, and maintenance.

Whichever way you decide to break down the expenses, ensure you both have a detailed budget and realistic plan to stick to it. Discuss what happens if they fall behind on their portion of the costs. If buying a vehicle is too great a strain on your finances, postpone the purchase and help your teen make a savings plan to work toward their goal.

Buying a car is often a teen’s first time taking part in a major purchase, and the process is full of teachable moments. Include your child in every step of the car-buying process, from researching vehicles and searching for the best deal to the test drive, inspection, and negotiation.


Factors to Consider When Deciding Between a New & Used Car

If you’ve decided to buy your teen a car, the next decision to make is whether to buy new or used. For most families, buying a brand-new car for their teenager is financially out of reach. According to the Insurance Institute for Highway Safety (IIHS), 83% of teenagers with cars drive a used one.

But even if you can purchase a new car for your child, should you? There are some key factors, features, and pitfalls to consider while finding the best fit for your family and budget.

Cost & Maintenance

While a new car may cost more upfront, used cars can come with higher maintenance costs that add up over time. When deciding whether to buy new or used, calculate what it will cost to maintain the car each year, including tire rotations, oil changes, and unexpected repairs.

There are two online tools available to help you do the math. Edmunds True Cost to Own calculator tabulates the five-year costs of owning a vehicle, including depreciation, auto loan interest, taxes and fees, insurance rates, fuel costs, maintenance, and repairs.

CarMD’s Vehicle Health Index compiles nationwide data to deliver a list of the most reliable makes and models. It ranks repair costs based on certified mechanics records dating back to 2011.

New Car Cost & Maintenance

There are some benefits to purchasing a new car for your child, but frugality isn’t one of them. According to CarFax, new cars lose up to 20% of their purchase value within the first year of ownership.

Given the high cost of new vehicles, their rapid depreciation, and the statistical likelihood of a fender bender (or worse), a brand-new car is likely not the best choice for most teenagers from a purely financial perspective.

On the other hand, they usually require less maintenance than used cars, and depending on the model, they may have better gas mileage.

For example, let’s say you buy your teen a base-model 2021 Toyota Corolla L sedan, and you live in Philadelphia. Using the Edmunds True Cost to Own Calculator, your estimated costs for purchase, repairs, and maintenance for five years are:

Purchase Price$20,025
Repairs$618
Maintenance$3,117
Total$23,760
Average Cost Per Year$4,752

Certified Pre-Owned Car Cost & Maintenance

Aside from buying new, a certified pre-owned vehicle offers the greatest certainty and protection against any mechanical problems.

To become certified, the car must first meet maximum age and mileage limits set by the manufacturer and pass a multipoint inspection to meet safety, emissions, mechanical, and cosmetic standards. Any imperfections must be resolved for the vehicle to be certified. The car is thoroughly cleaned and reconditioned to sell on the lot in like-new condition.

Always ask to see the full inspection report and warranty details before finalizing the purchase of a certified pre-owned vehicle. That way, you can see what repairs or touch-ups the dealership made during the reconditioning process.

You also have the right to have the car inspected by a licensed third-party mechanic to confirm the dealer’s report and verify there’s no hidden damage. If the seller objects to you taking the car for an extended period for inspection, there are mobile inspection services that can come to the seller’s location to examine the vehicle.

If you choose a reliable, low-maintenance model, a certified pre-owned car can bring you many of the new-car benefits while saving you several hundred dollars per year or more. They are usually newer models with low mileage but without the high cost of depreciation. According to CarFax, even cars that don’t depreciate significantly lose 20% or more of their value in the first year of ownership.

Many certified pre-owned vehicles also include a warranty, meaning you may spend less on repairs. A certified pre-owned car usually costs more upfront than a noncertified counterpart, but the cost often evens out over time when you factor in repair and maintenance costs.

Using Edmunds cost-to-own calculator, the estimated cost to purchase, maintain, and repair a certified pre-owned 2017 Toyota Corolla L with less than 40,000 miles on the odometer in March 2021 would be:

Purchase Price$14,005
Repairs$2,010
Maintenance$4,590
Total$20,605
Average Cost Per Year$4,021

(Exact cost may vary by zip code.)

Used Car Cost & Maintenance

Used cars have long been a popular choice for teen drivers because they cost less to buy upfront and families can worry less about keeping an older car in pristine condition.

If a certified pre-owned vehicle is out of your price range, have a licensed mechanic inspect any used car you’re considering before buying — whether you’re purchasing from a dealer or a private seller. Note that high mileage is as important (if not more) as age when assessing a car’s reliability.

When considering a used vehicle, run a CarFax report using the vehicle identification number to turn up any red flags, including undisclosed collisions, repair records, odometer readings, and the number of previous owners.

Check for outstanding recalls at safercar.gov, and stay up to date on recalls once the car is yours. The NHTSA recommends checking for recalls every six months. If you notify the manufacturer of your used vehicle purchase, they will send you notifications when a recall is issued.

A used car that is not certified is usually older, has higher mileage, or both. These factors make it more likely you’ll need to repair or replace parts as they wear out.

The Edmunds calculator only tracks vehicles as far back as 2015. But using the repair and maintenance estimates from CarEdge.com, the estimated five-year cost of repairs and maintenance for a 2013 Toyota Corolla L with no accidents and between 50,000 and 75,000 miles on the odometer in March 2021 would be:

Purchase Price$9,700
Repairs & Maintenance$3,684
Total$13,384
Average Cost Per Year$2,676

Safety

As a rule of thumb, buy the safest car you can afford with your budget. Midsize sedans, wagons, and small SUVs offer the best balance of size and weight to keep occupants safe. Stick with the base model engine to avoid putting teens behind the wheel with more horsepower than they’re prepared to handle.

It’s better to spend an extra year saving for a newer, more reliable model with crucial safety features than to cut corners on cost with a beater. Choose a car with as many advanced safety features as you can afford.

Essential safety features for teen drivers include:

  • Front and Side Air Bags. Your teen’s car needs to have both front and side air bags to provide crucial cushioning for the torso, head, and neck during front, rear, and side-impact crashes.
  • Seat Belt Detection. Audible and visual alerts activate whenever someone in the front or rear seats is not buckled up while the car is in motion.
  • Antilock Braking Systems. This technology ensures the driver can safely steer the vehicle while braking in an emergency.
  • Electronic Stability Control. This technology stabilizes the car during sharp turns or slippery conditions and helps to correct oversteering.

According to the NHTSA, these safety features can eliminate 94% of fatal crashes involving human error. That makes them ideal for teens, who are more likely to make such errors while driving:

  • Forward Collision Warning. This advanced safety system detects the speed of your vehicle relative to the one in front of you. An alert sounds to warn the driver of an imminent crash with the car in front of them.
  • Automatic Emergency Braking. This active safety technology takes the forward collision warning a step further. If the driver doesn’t respond to a collision warning in time, the automatic emergency braking system kicks in and applies the brakes to prevent a crash or reduce its severity. According to a 2014 study from Children’s Hospital of Philadelphia, teen drivers tend to misjudge speed and following distance more often than adults. That means this technology can be especially beneficial for teen drivers.
  • Backup Warning. Some cars have rear sensors to scan for objects behind your car and alert the driver if they detect one.
  • Backup Camera. A dashboard display shows a wide-angle view of the entire area behind the vehicle whenever the car is in reverse.
  • Blind Spot Detection. Now standard on many newer-model vehicles are sensors mounted on the side mirrors or rear bumper to detect vehicles in neighboring lanes. If the sensors detect something, they alert you via an audible or visual warning that may become brighter, louder, or faster if you signal to change lanes.
  • Lane Departure Warning. This system uses a camera near the rearview mirror that monitors your vehicle’s position in a lane. Any movement to leave the lane unintentionally — including merging without signaling — triggers an alert to the driver.
  • Lane Keeping Assist. Sometimes paired with a lane departure warning, the vehicle automatically applies light steering or braking to correct an unintentional lane departure.

These safety features are well suited to help prevent the most common errors teen drivers make. In a 2011 study of teen driving behavior published in the journal Accident Analysis and Prevention, failing to scan for and identify hazards, driving too fast for conditions, and distracted driving accounted for almost half of all crashes.

New Car Safety

The auto industry has made dramatic improvements to vehicle safety in the last decade, and that’s a significant advantage of buying a new car for your teen. Many safety features that were luxury options five years ago, like backup cameras, side-curtain air bags, and collision warnings, are now standard or even required in all new cars.

If you’re springing for a new car, ensure it includes all the safety features you can afford. Honda, Subaru, Nissan, Kia, Toyota, and Chevrolet have affordable 2020 models highly rated for teen driver safety by the IIHS.

Certified Pre-Owned Car Safety

A certified pre-owned car that is just a few years old is an excellent alternative to a new car. These cars are new enough to include most of the latest safety technologies at a lower cost than buying new.

Certified pre-owned vehicles have also passed the manufacturer’s required maintenance and safety standards to ensure they’re “like new” and safe to drive on the road.

Used Car Safety

Older cars may lack some important safety features. If you are buying used, aim for the newest model you can afford with as many recommended safety features as available.

If possible, go for a model year 2012 or later since electronic stability control became a mandatory safety feature for cars made starting with that year.

Since driving too fast for road conditions and overcorrecting to avoid a hazard are two of the most common errors that cause teenagers to crash, don’t skimp on this critical safety feature if you can help it.

To help you decide, the IIHS updates its list of the safest used cars for teens each year.


Teen-Driver Tech

A growing number of manufacturers and third parties offer technologies made specifically to help inexperienced drivers practice good driving habits.

New Car Technology

Many car manufacturers offer popular integrated teen-driver technologies. Hyundai, Ford, Chevrolet, and Volkswagen offer built-in teen-driver safety systems that alert teens if they’re speeding or tailgating, disable the radio until they buckle their seat belts, and even warn kids that curfew is looming.

Most of these systems also include features that notify parents when the car leaves preset geographic limits or exceeds a set speed limit. Some even offer a “report card” on each car trip, including distance driven, tailgating notifications, seat belt use, and maximum speed.

Most of these systems carry a monthly or annual subscription cost averaging $200 per year, so factor that into your car-buying budget.

Certified Pre-Owned Car Technology

A certified pre-owned model year 2016 or later may offer built-in teen-driver technology. If this technology is important to you, buying certified pre-owned is more affordable than buying new.

However, these cars can be hard to come by since families who purchase a new car for their teen are likely to keep that car in the family as long as they need it.

Used Car Technology

If you can’t afford or find a car with all the built-in teen-driver bells and whistles, smartphone apps and aftermarket devices can connect to many cars. They offer a level of parental oversight with features like preset speed, perimeter, and emergency alerts.

TrueMotion Family

Every family member can download the free TrueMotion Family app to give users a complete picture of their driving habits and capabilities. It tracks the driver’s route, phone use, and texting while driving along with aggressive handling, speeding, and other risky driving behaviors.

If you’re brave, you can turn it into a friendly competition and rank each driver in your family. Reviews of the app say the scoring system effectively helps drivers break their bad habits. It is based on a 100-point scale — the higher your score is, the safer you’re driving.

Hum by Verizon

Hum by Verizon (both Hum+ and HumX) uses a device plugged into the car’s onboard diagnostics (OBD-II) port located under the dashboard of all vehicles made since 1996. The device syncs with parents’ phones to deliver speed alerts, vehicle location tracking, geographic boundary alerts, emergency response, and roadside assistance.

Hum+ costs $29.99 for the device and $10 per month with a two-year commitment. HumX adds a Bluetooth speaker and creates a Wi-Fi hotspot in the car and costs $69.99 for the device and $15 per month.

Mama Bear

With subscriptions ranging from $0 to $6.99 monthly, MamaBear bills itself as an all-in-one safety and awareness tool for parents and families.

The app allows you to set a speed limit and notifies you when the vehicle exceeds it, whether your child is the driver or the passenger. It also lets parents set locations and receive arrival and departure notifications.

Beyond driving, the MamaBear app also includes social media and text message monitoring that allows you to keep track of followers, pictures, and mentions.

Life360

Life360 automatically detects when a phone is in motion (provided the phone is turned on). It tracks excessive speed, hard braking, rapid acceleration, and phone use for each trip and delivers a weekly driver report.

Parents can also set up push notifications when their teen has completed a trip, including a map that shows the destination. If a driver is driving at least 25 mph and is involved in a collision, the app can detect it and notify emergency services and family members of the location.

Pricing ranges from $4.17 to $16.67 per month.


Warranties & Service Contracts

A warranty is a manufacturer’s or seller’s guarantee of a product’s characteristics or quality— in this case, a vehicle — as used within a specified time frame or mileage.

If something covered by the warranty goes wrong with your car within the warranty period, the warrantor will fix the problem. The cost of a warranty is included in the purchase price.

If you’re purchasing from a dealer, you may also be offered several different service contract options during the negotiation. A service contract is a contract between the seller and buyer covering maintenance and servicing over a specific period.

Even though service contracts are often casually called “extended warranties,” they are not the same. The buyer pays extra for a service contract, almost like an insurance policy for vehicle maintenance. A true extended warranty is included in the purchase price.

There are many types of service contracts, including general vehicle service contracts, tire and wheel protection, dent protection, and windshield repair.

When deciding whether to buy a service contract, consider what the original warranty covers, what the agreement covers, any limitations (such as requiring service be done by specified times or in selected locations), how long you intend to have the car, the vehicle’s mileage, and overall reliability.

Whether or not a service contract is a good deal depends on your specific circumstances, your teen’s level of responsibility, local road conditions, and the total value of the contract’s services versus its cost.

New Car Warranties & Service Contracts

One of the advantages of buying a new vehicle is full warranty coverage, including a longer powertrain warranty on expensive major mechanical components, such as the engine and transmission.

A shorter-term bumper-to-bumper warranty covers issues like heating and air conditioning, display panels, and infotainment systems.

In addition to the cost of unexpected malfunctions or defective parts, many new car warranties also cover extras like routine maintenance or roadside assistance. Among the nonluxury carmakers, Kia, Mitsubishi, and Hyundai offer the best 2021 factory warranties, with basic coverage beginning at five years or 6,000 miles.

Most car dealers also offer buyers a service contract as an add-on to the basic factory warranty.

Read up on the warranties provided by the manufacturers you’re considering so you know exactly what they cover when it comes time to negotiate the purchase and add-ons. That can help you avoid paying for a service contract when the standard warranty covers most of what you think your teen needs.

But in other cases, the service contract may be well worth the purchase price, especially if it covers things your warranty doesn’t. For example, paying an extra $200 for tire and wheel protection might be worthwhile for a teen driver if you happen to live in an area prone to potholes.

Pre-Owned Car Warranties & Service Contracts

Most certified pre-owned warranties are very similar to the vehicle’s original bumper-to-bumper and powertrain coverage. Read the paperwork thoroughly to identify any exceptions.

For instance, some dealers shorten or modify certified pre-owned warranties to adjust for age or mileage. Others may include a deductible.

Certified pre-owned warranties are factory-backed, meaning any repairs made under warranty use factory-approved parts and procedures.

Every brand’s program is a bit different. As always, do some comparison shopping. Kelley Blue Book offers a comprehensive comparison tool for certified pre-owned warranties. Kia, Ford, Honda, and Hyundai all offer standout warranty periods and coverage benefits for their certified pre-owned fleets.

You can also purchase a service contract to cover the most common types of issues or repairs your teen’s car will need. A good service contract might save you money on repairs and may come with added benefits like roadside assistance, free towing, free oil changes, or rental car reimbursement.

Service contracts are available through some dealerships as well as third-party companies. There’s no hard-and-fast guideline as to which option offers the better deal. The cost varies based on the provider, your vehicle, and your driving habits.

Get some quotes before deciding. Weigh the costs and benefits, and choose wisely since there are disreputable companies out there. Autopom and CarShield are among the companies with consistently positive reviews. Do thorough homework on what the service contracts cover, and check the Better Business Bureau and Trustpilot for customer complaints and reviews.

Used Car Warranties

When upfront cost is the most critical factor, purchasing a reliable, noncertified used car can be the best option as long as it passes your mechanic’s inspection. Then, you can set aside any savings to cover the cost of repairs if and when they come up.

Used cars sold by private owners don’t offer warranty coverage unless they still have time left on their original warranty. Depending on your state’s laws, the same may go for a noncertified used car purchased from a dealer. That makes the purchase price of a used car much lower than a certified pre-owned vehicle, but you trade peace of mind if there are any significant problems the inspector didn’t catch.

If you’re worried about having enough cash set aside to pay for big repairs out of pocket, third-party companies sell service contracts for noncertified used cars. If you’re buying a reliable used vehicle or know how to do many minor to moderate repairs yourself, you likely don’t need this option.

However, if the car is an older model or has high mileage and the monthly premium for a service contract is in your budget, it may be a worthwhile safety net in the event of costly repairs not covered by insurance. Most service contracts offer coverage for vehicles up to 250,000 miles.

To decide if additional coverage is a good idea for your teen’s car, think about the car’s age and mileage and which repairs it is most likely to need. If it’s a high-mileage car that may need a new transmission or engine repair, that service contract may pay off.

Research your options carefully. Check for customer reviews and consumer complaints. Read the terms of the contract and make sure you understand the details before you purchase one. There are good options out there, but there are just as many scams.


Insurance

Remember to factor car insurance into the total cost of your teen’s vehicle. Adding your young driver to your policy is usually the best route since it’s less expensive than having them start their own policy.

Still, because teenagers have a higher crash rate than adult drivers, insurance costs are much higher for teen drivers. The younger the driver, the higher the premium.

The make and model of a vehicle play a role in the overall cost, with insurers taking things like safety, fuel economy, and the likelihood of theft into consideration. Sites like CarInsurance.com allow you to compare the average cost to insure specific vehicles by year, make, model, and location.

According to market research firm Statista, the average annual cost of auto insurance for a 25-year-old was $3,207 in 2020, while the same coverage was $7,179 for an 18-year-old driver. On the bright side, adding another vehicle to your existing policy usually results in a discounted rate for you.

Many insurers offer incentives for students who keep good grades or complete a driver training course. Check with your insurance provider and compare rates with other providers.

It may turn out you find a better rate for all your vehicles by switching insurance companies. Look for one that offers accident forgiveness and teen-based discounts for enhanced safety technologies. Allstate, Nationwide, State Farm, Progressive, and Erie have incentives for teen drivers and their families.

Note that if you are taking out a loan to finance your teen’s new ride, the lender requires comprehensive and collision coverage until you pay off the loan. The most recent data available from the National Association of Insurance Commissioners tracked insurance costs from 2017 through 2018. It showed that adding comprehensive and collision coverage expanded insurance costs an average of $550 annually.

Additionally, guaranteed asset protection (gap) insurance pays the balance of the loan if the car is totaled or stolen. In other words, it fills in the “gap” between how much you’ve paid and how much you owe, even if your vehicle is now worth less than what you owe (called being “upside down” on your loan).

You can buy gap insurance from a lender, your car dealer, or an insurance company. According to the Insurance Information Institute, including gap insurance with collision and comprehensive coverage adds only about $20 per year to the annual premium.

New Car Insurance

Although new cars have low mileage and are presumably more reliable than older vehicles, new cars are more expensive to insure. It costs more to repair or replace a new car, and these costs are reflected in drivers’ premiums.

It is also more likely you would need a loan to purchase the new car, meaning you’d also be required to buy the comprehensive and collision coverage. If you financed the vehicle, gap is worthwhile since new cars depreciate rapidly and teens are more likely to have accidents that could total the vehicle.

Certified Pre-Owned Insurance

Purchasing a certified pre-owned car for your teen typically saves you money on insurance since repairs are often less expensive. Since certified pre-owned cars are usually newer models, they are also more likely to include safety features that can translate to lower premiums.

If you took out a loan to buy your pre-owned car, you must still carry comprehensive and collision coverage. Gap insurance is also a possibility if you owe significantly more than the total replacement value or want the assurance you can pay off the vehicle without adverse financial consequences if your teen totals it.

Used Car Insurance

A used car is usually less expensive than a certified pre-owned vehicle, so it may cost less to insure overall. Because you’re more likely to find a used car you can afford to buy outright, you can choose to do without comprehensive and gap coverage and save on your premium.

But if an older car lacks essential safety features that come standard in newer cars, like backup cameras or lane-change detection, it could drive your costs up.


Fuel Economy

Fuel economy refers to the number of miles a car can travel per gallon of gasoline (or mpg equivalent for electric vehicles). With the federal government’s trend toward requiring tighter fuel-efficiency standards, you have no shortage of options.

Hybrids, diesel, electric, and conventional gasoline-powered cars are increasingly fuel-efficient thanks to advances in engine technology, body design, and computerized sensors to maximize fuel economy.

A fuel-economy difference of just a few miles per gallon can add up. According to the Federal Highway Administration, the average teenager drives about 7,500 miles each year. As of February 2021, the average price per gallon of gas was about $2.60.

That means a 32-mpg vehicle would save more than $200 per year over a 24-mpg car. And a 52-mpg hybrid electric saves $437.50 over the 24-mpg vehicle. Fuel savings like that could cover a monthly loan payment or a portion of your annual insurance costs.

Typically, smaller, lighter cars with less powerful engines get more miles per gallon than heavier vehicles with larger engines. However, smaller, lighter cars have lower ratings for crash safety and aren’t the best choice for young drivers. Balance safety with fuel economy and cost to find the best fit.

A site jointly run by the U.S. Department of Energy (DOE) and Environmental Protection Agency (EPA), fueleconomy.gov provides data for cars from the current model year back to 1984, including a side-by-side comparison tool. Edmunds also offers a useful cost-to-mileage calculator to help you make an informed decision.

New Car Fuel Economy

Buying a new car gives you the largest selection of fuel-efficient vehicles with all the latest technologies. According to the joint EPA and DOE 2020 Fuel Economy Guide, nearly all the top picks for fuel economy in 2020 were hybrids like the Toyota Prius Eco, Toyota Corolla Hybrid, Kia Niro FE, and Hyundai Ioniq Blue. Of these, the Corolla also gets high marks for teen drivers.

Newly purchased electric and plug-in hybrid cars may earn a federal income tax credit of up to $7,500, depending on the battery’s capacity and how many vehicles of a particular model the manufacturer has sold. The IRS provides a list of approved vehicles eligible for the electric car tax credit and the current credit available.

But choosing a plug-in vehicle comes with additional considerations and costs, such as the availability of charging stations and the possible need to install one near your home. And electric-only cars get far fewer miles from a charge than their gasoline-powered counterparts. Hybrid models can cover longer distances than electric and gas-only vehicles while delivering impressive fuel economy.

Certified Pre-Owned Car Fuel Efficiency

According to Energy.gov, an office of the DOE, fuel economy should not decrease much as a car ages. A dramatic drop-off in mpg usually indicates a mechanical issue a professional should examine. Performance largely depends on keeping up with the required maintenance, like oil changes and tire rotation and inflation.

Since certified pre-owned vehicles are well maintained and relatively new, they’re likely to return approximately the same fuel economy they did for their first driver. Pre-owned buyers have their pick of newer-model vehicles with the latest fuel-efficiency technologies while also having a dealer-backed guarantee the car is in like-new condition.

But if you buy a certified pre-owned electric or plug-in hybrid vehicle, you’re ineligible for the tax credit. But it’s an excellent bargaining chip when negotiating the final purchase price.

Among the best choices for safety and fuel economy in a certified pre-owned or used vehicle are Toyota Prius v (2015 and later), Honda Accord (sedan and coupe, 2013 and later), Mazda 3 (sedan and hatchback, 2014 and later), Kia Niro (hybrid and plug-in hybrid, 2018), and Mazda 6 (2015 and later).

Used Car Fuel Efficiency

Older-model vehicles tend to be less fuel-efficient than their newer-model counterparts in the same class simply because fuel economy improves as technology advances. But a well-maintained older car can still be fuel-efficient.

If you opt for an older-model vehicle the manufacturer hasn’t certified, do your homework to choose the safest model you can afford with the best fuel economy. Then, get a mechanical inspection from an impartial mechanic to verify it has been well maintained and is in good condition.


The Verdict: Is New, Pre-Owned, or Used Right for Your Teen?

Choosing the right car for your teenager is a weighty decision from both a financial and a safety standpoint. The decision comes down to the balance of value and safety.

You Should Buy a New Car If…

  • You Can Afford It. New cars offer the best safety features, are often more fuel-efficient, and may come with built-in technologies to keep you connected to your teenager on the road. But all the bells and whistles come at a premium. Budget for the purchase price, any interest accrued through financing, and the higher insurance costs associated with comprehensive and collision insurance (and gap insurance if you’re buying that).
  • You Want Low Maintenance Costs. New cars require fewer repairs, so you can most likely save time and money on maintenance costs. If something unexpected fails through no fault of the owner, your new car warranty may cover it. Some automakers like Chevrolet, Hyundai, Jeep, Toyota, and Volkswagen also cover limited routine maintenance like oil changes and tire rotation for the first year or two of ownership or until you reach a mileage limit.
  • You Want Your Choice of Safety Features. A perk of buying new is the ability to select from the latest and greatest safety features and customize the options that best suit you and your family, like automatic braking or lane-keeping assist.
  • Your Teen Will Drive a Lot. If your teenager needs to drive frequently for work or extracurricular activities, the safety technologies offered by a new car are a worthwhile investment. That’s especially true if they’ll be on highways or rural roads, where the most severe teen crashes are more likely to occur, according to a 2010 study published in the Journal of Safety Research.
  • You Want a Good Warranty Without a Service Contract. As the owner of a brand-new car, you benefit from full bumper-to-bumper and powertrain warranty coverage without needing to spend additional cash on a service contract.
  • You Want the Best Fuel Efficiency. Fuel efficiency in new cars has improved vastly in just the last few years. According to fueleconomy.gov, the addition of new technologies like continuously variable transmission, low-rolling tires, aerodynamic design, and hybrid technologies can improve gas mileage by as much as 35%. If you find a model that includes some of these features, your teen can save thousands of dollars in gas money compared with what they would spend with an older car that doesn’t have these advances.
  • You Have Multiple Kids. If you have a succession of teen drivers under your roof, investing in a new car ensures each child will have something safe and reliable to drive when their time comes — so long as it survives the older drivers.
  • You Want Your Teenager to Have a Long-Term Car. If you and your teenager can afford to buy a new car, it can last them for a decade or longer. If you pay the vehicle off within six years or so, your twenty-something can have a reliable ride without having to worry about paying off a student loan and a car loan at the same time.
  • Your Teen Will Drive Younger Siblings or Other Young Passengers. A 2015 study published in the Journal of Adolescent Health found that driving with passengers increases the risk of your teen getting into a crash. However, if you know your kid will be chauffeuring siblings or friends to activities, a new car loaded with safety features can help keep everyone protected in the event of a crash.

You Should Buy a Pre-Owned Car If…

  • You Want a New Car but Don’t Want the New-Car Price Tag. With a pre-owned car, you can get some of the latest technology and safety features along with the peace of mind that the car has all the repairs and replacements it needs to run like new.
  • You Want Low Maintenance Costs. Since certified pre-owned cars are refurbished to nearly new condition, maintenance costs stay almost as low as they are for a new car.
  • You Want at Least Some Safety Features. Since certified pre-owned vehicles are usually later-model cars, you can find many of the advanced safety features you want for your teen driver. However, you’re limited to what is on the lot rather than having the option to customize the features you want.
  • The Family Car Is Older. It is better to have your teen drive the newer, safer model than to put them behind the wheel of an older car without crash-avoidance and -protection technologies like side-curtain air bags, antilock brakes, electronic stability control, and blind-spot detection. However, you must balance this perk with the likelihood your teen will total the vehicle. If you’re concerned about affording another car in that case, a used car with some of the same safety features may be a better way to go.
  • You Want a Decent Warranty Without a Service Contract. Certified pre-owned cars come with warranties comparable to those that come with a new car, so you can usually avoid purchasing a service contract. The coverage period may be slightly shorter, or the deductible may be slightly higher, so read the paperwork carefully.
  • You Want Better Fuel Economy. Fuel economy for certified pre-owned cars made within the last five years is usually as good or nearly as good as it is for new vehicles.
  • You Want to Have It for a Long Time. Barring any teen-driver catastrophes, a certified pre-owned car should last long enough to drive your teenager well into young adulthood or pass on to the next driver in the household.

You Should Buy a Used Car If…

  • You Have a Limited Budget. Used cars cost less to buy upfront, so you may be able to buy the car without a loan, and even if you can’t, your monthly payments will be more affordable. Research which used car models and years are safest, lowest-maintenance, and most fuel-efficient to get the most bang for your used-car buck.
  • You Can Do Your Own Vehicle Maintenance. Much of the expense of a used car comes with maintenance costs. If you’re handy with repairs like belt replacements, tire rotations, oil changes, and alternators, you can save on the usual maintenance and replacement costs that come with owning an older car. Passing this knowledge to your teen helps them save on car care for the rest of their lives too.
  • You’re OK With Fewer Safety Features. Many parents are willing to forego the backup camera, automatic headlights, or fancy teen driver monitoring systems available in newer vehicles. After all, you made it to adulthood without that technology. If you trust your kid is a responsible enough driver to manage with the basic recommended safety features, a used car can serve them well. And you can get safety apps to give you peace of mind your teen is following the rules.
  • You Consider This a Training Car. Even if you trust your kid not to take unnecessary risks, you know the odds are that this car is going to have its share of scratches, dents, and mishaps. Shop around for the safest used model for them to get around while saving money for something better.
  • Your Teen Won’t Drive Far. You can worry less about fuel efficiency if your teen only drives to and from school or other short distances.
  • You Want to Keep Insurance Costs Low. Teen drivers are expensive to insure, and as long as they have the safety features you want, older cars cost less to insure.

Final Word

There is no denying it’s nerve-wracking to send your kid out on the open road. Ultimately, you want to buy the newest car you can afford with the most advanced safety features and good fuel economy to maximize their safety while keeping insurance, maintenance, and driving costs low.

But if you buy them a starter car or plan to keep the vehicle you buy them for younger siblings, chat with your new driver about the need to start saving for a vehicle they can drive after graduation.

See our list of best cars for college students for help.

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