Every parent has to face, at one time or another, the issue of a child getting his or her first car. This can be a very contentious issue, particularly if the finances are not as comfortable as they should be. The main question is this – how much help should you give your child to buy a car?
Advantages of helping a child to buy a car
When you are making a withdrawal from your own bank account to help your child to purchase a car then there are a couple of advantages. You could, for example, give them the money as a birthday or Christmas gift so that they can put it towards the cost of the vehicle. This means that your shopping just got a bit easier, because you don’t have to spend time wondering what to buy and there is no wrapping involved!
You will also find that you get to approve the final choice of vehicle, so you can be sure that your offspring is not going to be driving around in a car that is held together with duct tape.
Disadvantages of helping a child to buy a car
Does it really teach your child the ins and outs of finance and budgeting if you help them out? They can learn a great deal about handling their money if they are not getting help from their parents and they have to save up for what they want. Some kids get used to being bailed out by their parents and this can also put pressure on the relationship between them.
Paying for the car themselves will teach them that it is not just about the cost of the car. They will learn that it costs for gas, repairs and insurance, and that they will have to find that money, so will need to have savings that they can fall back on at any time.
Other options
So what happens if you do not have the cash to help out, and the car is deemed a necessity? It may be that you have to look for finance for the car. The good news is that there are plenty of different options out there, with many lenders offering finance for cars. A loan is not always the most obvious solution but if you have the means to make the repayments, it could mean that the car can be purchased sooner rather than later. There are even options that include bad credit car loans for those who have had financial problems in the past, and these can be quite reasonable when it comes to repayments.
There is no right or wrong answer here. You need to find a solution that suits both you and your child. A car is not a small purchase and they do need to understand that it is a financial commitment even if a car loan is not needed. The more that they can stand on their own two feet, the easier it is going to be for them in the long term, but there is nothing wrong with a parent wanting to give their child a helping hand to guide them down the road to independence.
