How SRP Can Help Your Teen While Purchasing Their First Car

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According to William Van Tassel, Ph.D., manager of driver training programs for the American Automobile Association (AAA), it's essential to consider safety, affordability, and reliability when purchasing a teen's first car.

It is also important to consider a reputable credit union to help you obtain an auto loan. At SRP Federal Credit Union in Augusta, Georgia, we have programs that can help your teen drive off with their first car with peace of mind.

Understand the cost

The combined cost of owning and operating a car is an important lesson to share with teens. The 2019 edition of AAA's Your Driving Costs report puts the average annual cost of driving a sedan 15,000 miles a year at 61.88 cents a mile—$9,282 a year. Put that figure into perspective for teens by converting the vehicle's cost into hours worked. To get an approximate figure, take the number of miles the teen will drive each year, multiply it by 62 cents a mile, and divide the result by the teen's hourly wage.

In addition, there are auto loans to consider. At SRP, we want you to get the best deal possible. Not only do we offer great rates everyday and flexible terms, we provide research materials to help you through the auto-buying process. We also provide advantages that will save your teen money:

• Qualified members select loan terms to fit their needs
• Little or no down payment required on new vehicles
• Simple interest financing
• Convenient payment options by mail, by automatic debit, by payroll deduction, in person, or through SRP Online
• No application or service fee
• Same-day loan approval

Make an agreement

If parents have a financial stake in the teen's car—a down payment, loan payments, insurance, or other costs—then they can consider creating a written agreement. The agreement should cover:

• Who pays for specific types of expenses, such as insurance or repairs.
• How the teen's behavior affects driving privileges.
• What the consequences will be if the teen fails to live up to the agreement.

If you would like more ideas on how to create a written agreement, visit one of SRP’s financial counselors. Our counselors have extensive training and are certified to extend financial counseling services. They can assist you by helping you understand financial principles, create financial goals and strategies to achieve them, and so much more. Through our in-person, individual assistance, they will help you chart a path to achieving financial wellness through financial counseling and education.

Avoid the rush

Many credit union lenders have seen teens rush into "deals" only to find they paid too much, agreed to a loan at exorbitant interest rates, lacked a clear title, or bought a car with serious defects. Parents and teens alike can benefit from taking time to share stories, do their research, and consider what owning a car will cost over time. It saves a lot of headaches in the long run.

At SRP in Augusta, we make applying for your auto loans super easy. We offer anytime, 24/7 Lending. Call us at 803-278-4851 to apply for a loan over the phone! You can also check your online application status at any time!  If you have an immediate need we can help you with, don't hesitate to get in touch with us.

Article Credits: CUNA

This article is for informational purposes only. All loans subject to approval and rate may vary depending on individual's credit history and other factors. Refinancing restrictions apply. All Credit Union loan programs, rates, terms, and conditions are subject to change at any time without notice. Membership required. SRP is federally insured by NCUA.