Getting a driver’s license is a huge milestone in any teenager’s life. But, as eager as new drivers are to hit the open road, there’s a hurdle to clear before it can happen.
Teens need access to a set of wheels.
Some parents prefer teen drivers to share a vehicle the family already has. But other families want or need the teen to have a designated vehicle. So, it’s natural to consider whether or not you should lease a car for your teenager.
Here are the pros and cons of leasing a car for your teen driver, as well as how this compares to buying them a car.
Pros of Leasing a Car for Your Teen
Leasing a car is attractive to many in general because it typically carries lower monthly payments than buying a car. This is because you’re only paying for the depreciation the vehicle experiences during your contract rather than the vehicle’s entire purchase price. Leasing also generally requires less money due at signing; even buying a used car may require a down payment of $5,000 to $10,000, which can make this route cost-prohibitive for some families.
Parents also want their kids to be as safe as possible behind the wheel. Leasing may help families afford newer-model cars with modern safety features — like blind spot detection, rear vision cameras, automatic braking and more.
Furthermore, whereas buying a car often involve a five-year-or-longer financial investment, many leases last two to three years. This time period may seem more attractive to parents who want to help their children secure transportation through high school or college, but may not want to invest in a long-term expense. The amount of time you plan to keep the vehicle in question is a major differentiator between whether leasing vs. buying a car makes more sense for your situation.
Cons of Leasing a Car for Your Teen
It’s common for leases to carry mileage caps around 12,000 miles per year. So, if your teen lives a long way from their workplace, high school, or college campus — or plans to take any long road trips in the vehicle — they may exceed this mileage limitation. Overage fees here can run you 15 to 20 cents per mile, which in turn runs up the total cost of ownership.
Leasing a car also generally requires the driver to keep the vehicle in great shape. Sure, some wear-and-tear is to be expected over the course of a few years. But any extra damage becomes the responsibility of the lessee. Unless you can trust your teen to take care of the car, you may find yourself on the hook for extra charges due to damage.
Last but not least, there is some truth to certain stereotypes about teen drivers. The data shows drivers from this age group are more likely to get in an accident than older drivers. As one car expert notes for Jalopnik, leasing means “every scratch and ding the car suffers at the hands of your kid” becomes your financial responsibility. This is precisely why some parents choose to buy a used vehicle — it saves them the stress of worrying too much about the financial blow of fender benders, scratches and major damage.
Only you can decide whether you should ultimately lease a car for your teenager or buy one — based on the numbers, the intended usage of the vehicle and your financial situation.