During the economic downturn, many parents are taking a long, hard look at how much they're willing to spend on their teen drivers. According to a recent survey by Allstate, 60 percent of parents with teen drivers have had to cut back on their children's driving expenses. Yet many are still generously paying some of the expenses necessary to keep their kids behind the wheel.
Wheels of their own
Despite the economic challenges their families face, teens today are more likely to have cars of their own compared with those of previous generations. More than 80 percent of parents with licensed teen drivers said their child has his or her own car or shares one with a sibling. When these parents were teens themselves, only 48 percent had a car of their own or shared with a sibling.
Yet these teens are not necessarily footing the bill themselves:
- 41 percent of the parents with licensed teen drivers said they'd be willing to spend more than $5,000 on a car for their child.
- More than half said they'd be willing to pay for registration fees.
- More than 40 percent said they'd pay for auto insurance and general car maintenance.
However, parents said they are less generous when it comes to paying for gas and for car damage caused by their teen driver. They also said that getting their teen his or her dream car is a low priority. The top priority? Getting a safe car.
Change of heart
The Allstate survey's findings suggest that parents are molded by their own teenage years when it comes to paying for car-related expenses. Those who paid for all their own driving expenses when they were teens were more likely to insist that their children pick up some of the cost.
Yet when their children reach the legal driving age, parents are likely to become more generous. Among all the parents surveyed, just 27 percent said they would pay for all diving costs. But among parents with children who had reached legal driving age, 46 percent said they would be willing to foot the whole bill.
Teens and auto insurance prices
Even if parents pay for the car, the cost of teen auto insurance can be a barrier. In fact, the cost of insurance alone is enough to cause teens to delay driving.
Why the high insurance prices? Statistically, teens are the most dangerous drivers around. Car crashes are the leading cause of teen deaths. According to the Insurance Institute for Highway Safety, 3,466 teens died in U.S. car accidents in 2009. Teen drivers are more than five times likely to get in an accident as drivers between ages 30 and 59. In other words, teens are a big -- and expensive -- risk for insurers.
Luckily, there are several insurance discounts that can soften the blow for parents and teens:
- Good student discounts. Students who maintain a "B" average or above can see savings of as much as 15 percent from major insurance companies like Progressive, Allstate and GEICO.
- Driver's education. Students who successfully complete driver's ed or a defensive driving course are eligible for savings from many insurance companies.
- Safety devices. Teens who drive vehicles equipped with safety features like air bags, antilock brakes, alarm systems and daytime running lights are eligible for insurance discounts.
- Safe driving. The best way to keep costs down is driving safely. A single accident can ding a teen's record -- and cause the insurance premium to skyrocket.