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Think safety when buying teen's first car

At 10 after 6 on a Thursday evening I was finishing at the office when the phone rang. It was a long time client, "Jim," who wanted to meet as soon as possible.

The sound of exasperation rang in his voice. As I asked what was wrong Jim confided that his 16-year-old daughter, "Kelsey," was driving him nuts and he needed a mediator.

It's not unusual for us to serve as a family counselor for a variety of topics. As I pondered the possibilities, Jim said it was bad. Many thoughts ran through my head from drugs to pregnancy.

Jim nervously laughed and said it was worse - he opened his mouth and made a comment about Kelsey getting a car when she turned 16.

As the clock marked her 16th birthday, Kelsey pronounced that she had already picked out her car. Jim knew he had created a monster.

A friend of Kelsey's had the car for sale and she had made up her mind. Jim forwarded the ad for a well used 2005 Volkswagen Beetle convertible. Kelsey made sure to exclaim that it was red several times.

Jim seemed to be a fraction of his usually strong self. He was muttering words about maintenance and insurance costs, but had a hard time saying no to his only child, especially after his wife had died.

As I sat down with the two I asked Jim what he thought was appropriate. He thought a 4 or 5 year old Toyota Camry or Honda Accord would be a good solution - but Kelsey protested. Again, she talked about how cute the little red convertible looked.

She then turned to me and pleaded "Please tell my father this is the car for me."

Unfortunately for Kelsey, I had done some research on Consumer Reports. This model of Beetle ranked poorly for maintenance issues and overall ownership costs.

However, one particular rating got my attention even more than the cost of insurance. It also ranked poorly for side impact results.

This was not what Kelsey wanted to hear and so she questioned what kind of car I thought she should get. I told Kelsey that in my opinion, all new teenage drivers should get a used cop car with vinyl seats, plastic floor mats and a brush guard on the front. They are cheap to buy, when they ding it no one will cry and they generally rate high for safety and collision standards.

As I said this, Kelsey told me I was the "meanest man she had ever met" - but she began to think that the Accord or Camry might not be so bad after all.

However, this dialogue presents a few good points.

First, as Kelsey demonstrated, car decisions are most often emotional ones. Removing the emotion helps to make wiser investment decisions. Even if you have found your "dream car" - there are many other options. If you set your heart on just one car, you back yourself into a corner as you lose all ability to negotiate. You will most likely pay too much.

Before dropping big bucks on a teenager's ride, remember that cars are depreciating assets. On average, a new car in the U.S. depreciates 40 percent by the time it is 3 years old.

Secondly, put safety first. According to the Center for Disease Control, car accidents are the leading cause of death for U.S. teens.

Knowing that teens are at a significantly greater risk, don't add fuel to the fire by putting them behind the wheel of some high horsepower car, a jacked up SUV or one with substandard safety features.

Your teen will most likely be in an accident. Put the odds of surviving in their favor. Focus on braking ability and airbags. Good gas mileage and reliability will help to keep them on the road without breaking the bank.

Although this may not be a prescription for your teen's dream car, it lowers the cost of ownership and puts the odds in their favor to battle another day when they are in an accident. There will be plenty of opportunity for your teen to buy their dream car when they are writing the check.

Dave Sather is a Victoria certified financial planner and owner of Sather Financial Group. His column, Money Matters, publishes every other Wednesday.

By Dave Sather, Originally published Tuesday, January 15, 2013, Victoria Advocate