Are you about to have a new driver in your household? Or possibly a student off to post-secondary education that needs a reliable form of transportation? Purchasing a new car for your child or helping them to purchase their own can be an exciting time. Though you may be wondering, can you finance a car for someone else? To best answer this question, you will have to determine if you are looking to finance a car in order to gift it to your child or you are looking to have your child contribute to or entirely pay for any car payments.
What Are My Options for Financing a Car for My Child?
When it comes to financing a car for your child, there are essentially two options. You have the choice of purchasing the vehicle in your name and allowing your child to drive the car or you may choose to co-sign a loan with your child. The route you choose will be dependent on your intentions for the vehicle and who you desire to be the named owner of the car.
If you choose to finance a car and give it to your child, nothing much changes for you. You would treat the purchase of this car like any other car purchase. The car would formally be owned by you, you would be responsible for loan payments, registration, and licencing of the vehicle. This is a straightforward option for anyone wishing for their child to have access to a vehicle without have the added responsibilities of vehicle ownership. Many parents choose to buy an additional car for their household once their children can drive.
If you are looking to have your child as the named owner of the car choosing a co-signing option may be ideal. In this scenario, your child would be named as an owner and be responsible for making payments on the car. Your child would also be responsible for all other aspects of owning a vehicle. In this scenario, your child would benefit from your good credit score and allow them to qualify for a larger loan than they likely would have been able to on their own. The downside to this scenario is that if your child misses a payment, you become responsible for it. You should only consider entering a co-signing agreement if you are prepared and willing to take on the added expense of your child’s car loan.
How Does Insurance Work?
If you choose to purchase a vehicle for your child, the responsibility of having insurance for the car falls on you as the owner. Your child will not need separate insurance to drive your car and will be insured under your policy. If your child is the typical driver of your vehicle you should be notifying your insurance company to ensure that you have the appropriate coverage.
If you choose to co-sign on a car loan for your child, it becomes your child’s responsibility to obtain insurance for their vehicle. This is a good option for parents who want to place an emphasis on personal responsibility when it comes to vehicle ownership and will allow your child to make important decisions for themselves.
What Are Some Great Cars for Students?
A used car can be a great option for any new car owner. A good used car is safe and reliable while also being more affordable than new cars. If you are shopping for a new car for your child you may wish to consider a used vehicle under $10K. At Autorama, we have many cars in our inventory that would be a great pick for a student or new driver. Some of our favourite picks for new drivers are the reliable and long-lasting Honda Civic or a Chevrolet Cruze. Both of these vehicles are safe and dependable and most importantly, something your young driver might actually want to drive. Consider reaching out to the experts at Autorama for assistance with choosing the right vehicle for your child. There are many things to consider and we would be pleased to offer our expert advice to ensure you get the right car for your child and family’s needs.
Should I Get an Extended Warranty for a Used Car?
When it comes to buying a car for your child, you are likely most concerned with the vehicle’s safety and reliability. Whether you dread the idea of your child getting stranded on the side of the road or you simply want to ensure they always get to work on time, a reliable car is important. At Autorama, we only sell quality used cars. For extra peace of mind, you may wish to consider purchasing an extended warranty for your child’s vehicle. This will help you to keep unexpected expenses of repairs lower and allow you to feel good knowing major repairs on the vehicle will be covered.
Where Can I Get Auto Financing?
Some buyers prefer to go to their bank for a line of credit when it comes to buying a vehicle though many prefer the convenience of financing a vehicle through their preferred dealership. At Autorama, we understand that every customer has a unique financial situation. That is why we offer a wide selection of auto financing loans with rates and terms that suit your needs. Consider reaching out to a member of our sales team to discuss your financing options or apply for pre-approval online. We are dedicated to helping our customers get into a car they love.
Buying a car for your child can be a dream come true for both of you. If you are looking to purchase a car for your child and expand their independence the sales team at Autorama can help. Contact us today to learn more about our extensive inventory of used cars in Toronto. We have a strong reputation for putting our customers first and look forward to assisting you in getting your child the car of their dreams.