| If your teenager is buying the car in his or her name, | | | | to the American Academy of Pediatrics, a 16-year-old |
| chances are they do not have established credit. This | | | | is more than 20 times as likely to have an accident |
| is the single biggest hurdle to being approved for a | | | | as other drivers. |
| teen auto loan. The young applicant will have to show | | | | Motor vehicle-related crashes are the leading cause |
| that he or she has steady income and can make the | | | | of death among 16-to-20-year-olds. Because of these |
| payments. Many lenders may also require a cosigner | | | | grim statistics, insurance rates for young people are |
| with good credit. | | | | between fifty and seventy percent higher than for |
| If the teen is going to be making the payments on | | | | drivers who are over 25 or married. Males will pay |
| the teen auto loan—and covering some or all of | | | | more than females since they are involved in more |
| the insurance, fuel and maintenance costs—it | | | | accidents. |
| would be wise to buy a vehicle that he or she can | | | | Professional Advice |
| pay off in 36 to 48 months. Then there’s the | | | | “I wouldn't get a small sport utility |
| down payment. At least twenty percent of the | | | | vehicle,” says Russ Rader, of the Insurance |
| car’s asking price is suggested to keep from | | | | Institute for Highway Safety. “They sit up high |
| getting upside down on the loan and owing more | | | | and have a tendency to roll over. They're promoted |
| than the vehicle is worth. | | | | as off-road vehicles, and it doesn't take much for a |
| Higher Insurance | | | | kid to want to test the limits of a vehicle. |
| According to the National Highway Traffic Safety | | | | “I also wouldn't get any high-performance |
| Administration, teens (ages 15-20) constitute seven | | | | sports car. If a young man falls in love with a car |
| percent of all licensed drivers but are involved in | | | | that's bright red, has a big engine and sits low to the |
| fourteen percent of all fatal auto crashes. According | | | | ground, it's probably not the car for him. |