New Car or Used Car for a Teen Driver?

Buying a car can be one of life’s greatest pleasures, but buying your teenage son or daughter their first car can be…gut-wrenching! It’s tough enough to realize that your little boy or girl isn’t so little anymore.   Or that they’ll be on the road driving–alone–with the same lunatics you’re on the road with everyday on the way to work.  But then there are the costs of adding yet another car to the family inventory.

One of the factors that affect cost and everything else about a car for your teenager is the kind you buy—new or used.  There are advantages going either way, and it always helps to analyze them in some detail before coming to a decision.

The new car advantage

Yes, buying a used car for a teenage will generally be less expensive, but there are certain advantages to buying new, especially if you’re thinking about the long term.


Small child washing the carLet’s say your teen is 16 years old and a junior in high school—it will be a number of years before she’ll be employed full-time and able to buy a car on her own.  A new car will last not only through the balance of high school and all the way through college, but also well into those early years in the job market when she’s just finding her way around.  How many “beaters” would she (or you) need to buy over the same time frame?

Lower repair bills

Repairs are an expected part of owning an older car.  By buying your teen a new car, you’ll be able to keep this expense to a minimum.  Perhaps equally important is avoiding the down time while the car is in the shop.  After all, part of the reason for buying your teen a car is so that you no longer need to do chauffeur duty.  That status will return each and every time junior is without a car.

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Latest safety features

Technology is advancing all the time, and part of it has to do with safety.  A new car will include safety features that an older car won’t have.   There will be enough risk with a teen driving at all, and safety features are one of the best protections against that risk.

Impress their friends (and yours!)

NO ONE ever wants to admit to this one, but it often is a factor in the decision to buy a new car for a teen.   Let’s face it, there’s at least a little bit of vanity in all of us, and we’ll often feed it to the degree that our finances will allow.  A used car just won’t have quite the same impact.

The used car advantage

Some parents might skip considering a used car if they can comfortably afford to buy their teenager a new one.  But there are factors that go beyond money in the decision to buy your child a car that are worth thinking about.

A car to cut their teeth on

We should never assume that a 16 or 17 year old knows how to drive just because he has his license.  He knows enough about driving to pass the state licensing exam but actually knowing how to drive is something altogether different.  That only comes from experience, and that takes time.  Do you want a 16 or 17 year old learning to drive in a $25,000 car?  Then there’s learning how to maintain the car, which again comes with time.

Something to look forward to in the future

Too many kids have too much today and we wonder why they have no sense of value.  One of the problems in “having it all” when you’re young is that there’s less to look forward to as you get older.   Like most other things in life, cars should come in stages, with the more modest ones coming early, and the better ones coming later when they’ve earned it.


As much as we don’t like to think about this, teens will get into accidents.  Somehow those will feel worse happening with a new car than they will on a used one.   The repair options will be cheaper with a used car since you can go with used replacement parts—something you’d never do with a new car.  This can be especially important if the repair is minor and you want to avoid filing an insurance claim that might increase your premium.


It’s not just that new cars cost more than used ones, it’s also the other expenses that go with new versus used.  For example, you may be able to buy a used car for cash, but the same amount of money may be little more than a down payment on a new car.  Then you’ll have payments—every month—that your teen can’t help you cover.   Car insurance is another issue.  You may not need to maintain collision coverage on a used car, but on a new one it will be required.

Which is the better option for a teen?

It will always be a matter of opinion, but mine is that used is the way to go.  The cost advantage of used cars combined with the teenage driver learning curve is too big to be overcome by any advantages that a new car may offer.

In addition, one of the lessons we need to teach kids is to live within their means, and I don’t think that buying them a new car is conveying this message.  A teen may be impressed with his new car for a few weeks, or maybe a few months, but once the newness wears off there’s a good chance he’ll want something even better.

What do you think?  Are the longevity and safety features of a new car sufficient to outweigh the cost and personal value advantages of used cars?

About kevinmercadante

Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids and can be followed on Twitter at @OutOfYourRut

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  1. As far as I’m concerned, a teenager is just as dangerous to themselves and others behind a go cart as they are behind a super-safe SUV. I wouldn’t ever buy my (future) kid a new car for their first car, as almost everyone has that 1-2 year wreck.

    Assuming you pay for their insurance as well, then I definitely wouldn’t put them in a new car. I say the trashier the car, the better. It’s a valuable life experience to know what its like to drive a beater.

    • I tend to agree. It also gives them a chance to poke around under the hood and learn what they can take care of themselves.

  2. Blake Schmidt says:

    We are going through this right now. Our daughter has gone through her 1st year of university with no wheels . She likes the bussing during the day but at night it is terrible. We are 4 hours away so we are looking at a new car as we can’t be there to help her if she has problems. The car we are considering has no options , not even air or cruise or automatic. The cost right now is 12200 tax in.

    • If you go used you could look into something that is 3 years old or less. Many used of that age have great warranty programs. Maybe something that just came off a lease?

      Another option I’ve seen, that we didn’t discuss, is to lease a car. No, it’s not always the most economical long-run, but for something like college you can get a lease that covers the years it will be used. After that, your child gets their own car.

      And you can also look into something like AAA or with your credit card or auto insurance to see what options there are for towing and such that you may already have or be able to get inexpensively.

  3. Scott Messner says:

    Buying a new vehicle is never the right decision if money is even the slightest concern for your family. Buying a used car without needing a loan is the best way as you are not increasing your debt.

    • That’s an excellent point Scott. Never buy more than you can afford, not the least of which because a car is a long term purchase. The hole you dig yourself into today will be with you for a few years.

      If the buy will be a tight squeeze maybe it’s time for another life lesson for junior–let him contribute toward paying for it.

  4. I’d vote for a used car for a teen. Invariably, they’ll get a few bumps and dings as they “cut-their-teeth” like you mention.

    There may be a few more maintenance issues, but even that can be a good learning experience …..they’ll understand the value of keeping a car in good working condition, not to mention they’ll probably appreciate a new car that much more when it’s time.

  5. Um, no car for a teen? Why is that not an option?
    I had no car as a teen. I had access to my parents’ cars. Until I got a full-time job in the summer after my senior year of high school, my parents never considered a car for a teen.
    The only reason it was considered at the time, was because they felt I had earned a little bit of independence for my last summer at home.
    My brother, however, did not earn the privilege of his own car.
    Even then, it was a 5 year old car, no power steering, no power windows, but it had AC, ABS & airbags. Cost them $3k (they spent their time, carefully shopping around, my opinion did not matter in this decision).
    It lasted me through my post-college full-time job, 10 years & 200k + miles later. It was fuel efficient (40+ mpg), which enabled me to cover the cost of my own gas, even though my parents covered insurance. This also enabled me to budget for the unforeseen/new to me aspects of car maintenance, such as regular oil changes, needing to replace the timing belt, ignition starter, etc.
    I find the practice of getting kids cars an abhorrent trend, despite the fact I was provided with one. I find solace in the fact that I did not wreck what I was provided with and used it till it ran no more.

    • RS – I wanted to keep the post to two choices, not three! Any more than two leads to confusion.

      Actually what you’re bringing up is what my wife and I are doing with our 16 (soon to be 17) year old son. Until he gets at least a part time job and can help pay for the car, he won’t get one. If he can’t pay at least part of the cost, then a car will be nothing more than another toy supplied by mom and dad. Bad lesson there!

      Apart from contributing toward the cost, absent a job, there’s really no reason for him to have a car. He could use it to commute back and forth to school or to cruise around after school, but both raise the risk of accidents or worse. And neither provides any real advantage from our standpoint.

      Thanks for bringing this up!

  6. Being a teenager myself, I’d say a used, new car. What I mean by that is a car that is used but was built around 2002. That way you get better crash test results, easy on the insurance, and won’t break the bank to buy :) and everyone wins. It’s not to expensive to manage either :)