Teens’ Guide to Buying a Car

Buying your first car is an exciting milestone, but it can also be overwhelming – especially when it comes to financing. Teenagers might be wondering how to navigate the process of saving, budgeting, and paying for a first car.

And as a minor, there are additional roadblocks in navigating this process. Many young people don’t know where to start when it comes to saving money, understanding car loans, or building credit. 

Typically teens rely on their parents or guardians for guidance and financial support when buying a car. While this can be helpful, it doesn’t always empower young people to take control of their financial future.

Additionally, traditional banks and financial institutions may not always have the right resources, making the process even more daunting. Savings accounts specifically for teens can help them understand financial concepts and work towards their goals – including buying a car.

People's Community Federal Credit Union’s Loyalty Savings Accounts are a great launchpad to help young people save money. We understand the unique challenges teens face when it comes to making their first big purchase. That’s why we’ve put together this comprehensive guide to help you through every step of the car-buying journey.

How to Save Money for a Car (as a Teenager)

One of the biggest challenges in buying a car is saving enough money for it. When you’re underage, you can usually save money by putting away some job income, gifts, or opening a savings account. Between school, part-time jobs, and other responsibilities, it can be easy to set aside funds! 

However, many teens struggle to develop good saving habits or find ways to earn extra money. Without a clear savings plan or strategy, it can take much longer to reach their car-buying goals.

Find out how much you can afford for your car with our affordability calculator here. 

Can I put my teenager on a car loan to build credit?

Yes, a minor can be put on a car loan to build credit by being added as a co-borrower or authorized user on the loan account. This can be a great way to help your teen start building a credit history.

What Is a Car Down Payment?

A car down payment is a lump sum money amount that goes towards the total car cost, paid at the time of signing by the buyer. This initial payment reduces the amount you need to borrow and can lead to lower monthly payments and better loan terms.

Can a minor put a down payment on a car?

Yes, a teenager can put down a cash down payment on a car. There’s no age restriction on making a down payment as long as you have the funds available. Financing the rest of the cost is another story!

At People's Community Federal Credit Union, we can help teens develop good financial habits that will serve them well when it comes time to take on credit responsibilities with our savings accounts for young savers.

Finance Your Future With a Loyalty Savings Account

We understand that navigating the world of savings accounts, car loans, and credit building can be overwhelming, especially for teens and their parents. One of the biggest challenges is finding a financer that offers competitive interest rates without fees or account service charges. Many traditional banks offer low interest rates on savings accounts, which can be discouraging for teens trying to grow their money.

At People's Community Federal Credit Union, we’ve created our Loyalty Savings Accounts with young savers in mind. It offers a high Annual Percentage Yield (APY) on the first $750, so teens can see their savings grow faster. Plus, our accounts come with no minimum balance requirements or monthly fees, making it easy for teens to start saving, even with small amounts.

For those under the age of 18, all they have to do is give a membership pledge of $5 and at least $1 to fund the account.

You can find out more about Loyalty Accounts with People’s here.

People's Community Federal Credit Union is proud to offer this Loyalty Savings Account and help teens save more effectively while also providing a practical way to learn about interest, compound growth, and the importance of regular saving. By opening an account with us, teens can take a significant step towards their car-buying goals while also developing crucial financial literacy skills.

So let’s get started on your journey to car ownership and financial independence today! Take control of your financial future by reaching out to one of our friendly member service representatives today. You can give us a call, fill out a form here, or drop by one of our branch locations. We can help make the dream of owning a car a reality while setting young savers up for long-term financial success.

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