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Steering the right course

The Wall Street Journal

Who should be in the driver’s seat when it comes to choosing, paying for and maintaining a teenager’s first car?

That’s the tough decision facing parents of teen drivers. First, they need to determine whether their kids should get their own ride at all — and if so, should the cars be used, new or family hand-me-downs. Then they need to decide who pays for what. And most important for many parents is the balance between safety and affordability.

Patrice Mitchell and Edward Doherty of Rochester, N.Y., faced those issues a year ago when their daughter Laine began driving. Safety was the top priority, but protecting the budget was a close second.

After consulting crash tests and visiting used-car lots, Mitchell, a freelance writer, and Doherty, city commissioner of environmental services, settled on a 2003 Ford Taurus with 21,000 miles on it. Equipped with driver- and passenger-side air bags and antilock brakes, the car cost $10,500 — and was paid for by the parents. Laine “could never earn enough to buy a car that I would be comfortable with,” Mitchell says. “It would be a junker.”

In bearing most of the costs, the couple isn’t unusual. Years ago, teenagers might scrape together a few hundred dollars to buy themselves rattletraps for getting to and from school. But today, many parents “don’t want their kids to drive that stuff,” says Art Spinella, president of CNW Marketing Research, in Bandon, Ore.

As a result, more parents are shouldering a higher share of the costs of their kids’ cars. Last year, parents made the entire car payment for about 40 percent of their teens’ cars, up from 20 percent two decades ago, according to a CNW survey. Teens contributed to at least part of the vehicles’ purchase cost in about 60 percent of the cases.

In trying to find a vehicle that’s both safe and affordable, parents should start with a basic assumption: “Teenagers are likely to crack up the car,” says Joe Wiesenfelder, senior editor for Cars.com, a Chicago-based Internet site that offers information about new and used cars. He recommends cars that are midsize or larger for superior crash protection, have side air bags and are relatively inexpensive to repair. He turns thumbs down on new cars. “For the same amount of money,” he says, “you can get a bigger, nicer, slightly used car” with several safety features.

His picks include: the Buick LeSabre, 2000-05; the Chevrolet Impala, 2000-05; the Toyota Camry, 1997-2005; the Ford Taurus, 1996-2005; the Honda Accord, 2003-05; and the Volkswagen Passat, 1998-2005.

Dr. Jeffrey Runge, a trauma-care expert who is head of the federal National Highway Traffic Safety Administration, says he took the hand-me-down route, but doesn’t recommend it. A few years ago, Runge gave his daughter, then a college freshman, the family’s 1994 sedan and bought a new 2001 car for himself. The 1994 car had some safety features, but not as many as the 2001 car — which was equipped with side-curtain air bags and electronic stability control.

“I’m not sure I made the wisest decision, to be honest,” he says. “But I think this is what a lot of people do: They make an economic decision to take the person in the family who is most likely to crash and put him or her in a car that’s the least expensive to repair.”

Runge won’t recommend specific models. But he notes that crash-test results are available on the sites of NHTSA ( www.safercar.gov) and the Insurance Institute for Highway Safety ( www.iihs.org).

Susan Ferguson, senior vice president for research at the highway safety institute, urges parents to steer clear of small, old vehicles for their children, even though the price might be right. She also urges parents to avoid giving teens sport-utility vehicles, which are harder to control and more prone to roll over.

If SUVs are used by teens, they should be equipped with four-wheel dynamic stability control, Runge says. And any small cars driven by teens, he says, should be equipped with side-curtain air bags, which offer superior head protection.

Finding a car can provide important financial lessons for teenagers. Parents can coach kids, for instance, on how to look up used-vehicle histories on the Web site of Carfax, the Fairfax, Va., provider of car histories. They also can teach kids to estimate resale values and maintenance costs and to look for the best car loans.

Operating costs, in particular, should be scoped out in advance and discussed with the new driver. “A Ford Explorer will be more expensive to run day-to-day than a Honda Accord, and parents and kids need to know ahead of time and agree on who is paying for what,” says Larry Gamache, communications director for Carfax. Operating costs, he says, include gas, oil changes, tuneups, tires and new parts.

Gamache urges parents to require teens to participate in the purchase in some way — either by paying some of the costs or agreeing to meet other standards, such as keeping their grades at a certain level. “You have to make sure your kid has a sense of ownership,” he says. “They’ll end up treating the car better than if it’s absolutely free.”

One way to make teenagers pay for their cars is to get them to agree to restrictions that increase their safety. Experts strongly recommend that parents bar a teen from driving other teens because the presence of passengers sharply increases accident and fatality rates. Also, they say parents should curb nighttime driving and insist that teens, who have the lowest rate of seatbelt use, wear them.

Car insurance is another important — and costly — issue. Jeanne Salvatore, a spokeswoman for the Insurance Information Institution, a nonprofit organization based in New York, says that, on average, parents can expect their insurance rates to rise 50 percent to 100 percent when a teenager is added to their insurance policies.

Sandra Gregorio, a Las Vegas schoolteacher, says her family’s insurance rose $4,000 a year — to almost $6,000 — after her 18-year-old son and 16-year-old daughter got their licenses. The family has three cars.

But even with such high costs, Gamache, of Carfax, says it’s crucial to avoid cutting corners on insurance. “You want to have as much insurance as you can possibly afford,” he says.

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