Teenagers are often blinded by fast wheels and a shiny exterior when it comes to getting behind the wheel of their first car. It’s the parents who get left paying off the loan. However, helping your teen take on their own financing can be a great lesson in responsible purchasing and also teach them the importance of building a positive credit history.

Here are a few tips for helping your teen driver finance and find their first car…

1.

You’ve heard the saying, “let them make their own mistakes, it’s the only way they’ll learn.” However, it’s tough to see your kids crash and burn when it comes to their personal finances. You can help your teen learn financial responsibility and build up a good credit score by offering to cosign a car loan. That way junior can be responsible for making the monthly car loan payments with the threat that a default payment can result in car repossession or damaged credit.

2. Arrange a personal loan

Teens who are desperate for their first car are often taken advantage of by shady dealers. The best way to prevent your teen from committing to a loan they can’t afford is to buy the car and set up an informal family loan with your child. Of course, the car title, tags, registration, and insurance will remain in your name as long as the teen agrees to stick to the monthly loan payment schedule. Once they reach adulthood, you can offer to change the ownership and remaining loan into their name.

3. Car safety

Teens don’t necessarily consider safety when they look for their first car. However, as a parent you know the safer a car is, the less the insurance rate will be. Educate your teens about the financial importance of buying a car that’s safe. Go online with your teen to research crash test results for different makes and models, keeping an eye out for safety equipment like efficient air bags, anti-lock brakes, blind spots, handling, and electronic stability control.

4. Consider a teen-friendly ride

Most parents can’t afford to buy their teenager an expensive sports car. But they can opt for a vehicle with certain features specifically created to optimize the teen driving experience. For example, seek out models with hands free capabilities so your teen isn’t tempted to use their phone behind the wheel. Certain models also offer built in navigation systems so prevent teens from getting lost and parental notifications that alert the owner if the car has taken beyond out of certain city boundaries or driven after hours.