Economy Puts the Brakes on Parents’ Spending for Teen Cars, Driving Expenses

Today’s parents follow own upbringings when it comes to type of car to buy, but more likely to spend money than their parents

Sixty percent of American parents whose teenage children currently hold a license and nearly half of all parents (46 percent) say that the economic downturn has led them to cut back on saving for or spending on their child’s driving, including the cost of a car and other related expenses, according to a new survey from Allstate.

Not surprisingly, income is a factor in spending and saving decisions.

• Nearly three-quarters (72 percent) of parents in households earning less than $30,000 per year say they are saving or spending less on their children’s driving, while just one-third (32 percent) of those in households earning more than $75,000 say the same.

Interestingly, among parents who already have a child with a driver’s license, 73 percent say their child has their own car, while another eight percent say their child shares a car with a sibling.

• This rate of teenage car ownership is considerably higher than what parents experienced when they were first driving (just 48 percent had their own car or shared with siblings), and also much higher than what is expected among parents whose children do not yet have a license (just 48 percent expect their children to have their own car).

No Free Ride

While most parents prefer their children make a meaningful contribution to the costs of driving, the survey shows the actions of parents with teenage drivers demonstrates the contrary.

• As parents get closer to having a teenager with a license to drive, they are more willing to pay for car expenses. While just 27 percent of all parents say they believe in fully paying for a car for their child, parents with a child licensed to drive are nearly twice as willing (46 percent). In contrast, only 10 percent of parents whose children are under the age of 14 or whose children don’t have licenses say they plan on purchasing a car for their child.
• Parents who say they paid for their own car when first driving are more likely to believe in higher financial contributions from their children.
• Among all parents, when asked what they would spend on a car for their child, 57 percent say they would spend $5,000 or less, and 41 percent would spend more than $5,000.

Regarding other costs associated with their children driving, parents are most likely to say they’ll pay all or most of inspections and registration fees (51 percent), insurance (45 percent), and general car maintenance (44 percent).

• Parents are least likely to believe in paying for gasoline (17 percent would pay for all or most of it), and expenses associated with damage caused by their child (17 percent would pay for all or most).

Safety Before Beauty

When thinking about the type of car they’d like their children to drive, 76 percent of parents say safety is their top priority, followed by reliability (18 percent), affordability (five percent), and fuel efficiency (one percent).

• Not a single parent says that appearance is their top priority for their children’s car.

Of those parents whose children have cars, the overwhelming majority, 94 percent, say their child drives a used car with a mean age of 9.3 years.

• This is almost the same mean age of the cars that the teens’ parents remember driving as teenagers, which was 9.2 years.

One-third of parents (33 percent) say they would not allow their children to drive the car that they drove when first driving.

• Even one-quarter (24 percent) of parents who said they personally started out driving a good car would not let their children drive that car today.

On the Road Again

Parents believe getting to school (89 percent) and work (97 percent) are good reasons why teenagers should be allowed to drive.

• They also support having their teens drive in order to lessen the need for parents to chauffer (81 percent cite as a good reason), and so teenagers can help run errands (88 percent).
• Parents are less enthusiastic about allowing teenagers to drive so they can meet up with their friends (56 percent not a good reason), and because almost every other teenager is driving (85 percent not good).
• Parents are split on allowing teenagers to drive because there’s no other way to get around (55 percent cite as a good reason, 43 percent not good).

About the Survey

The national survey of 600 American parents with children under age 18 was conducted September 6-8, 2011 via landline telephone, and has a margin of error of +/- 4.0 percent. The survey was conducted by FTI Consulting, Inc. (FTI) for Allstate.

About Allstate

The Allstate Corporation (NYSE: ALL) is the nation’s largest publicly held personal lines insurer known for its “You’re In Good Hands With Allstate®” slogan. Now celebrating its 80th anniversary as an insurer, Allstate is reinventing protection and retirement to help nearly 16 million households insure what they have today and better prepare for tomorrow. Consumers access Allstate insurance products (auto, home, life and retirement) and services through Allstate agencies, independent agencies, and Allstate exclusive financial representatives in the U.S. and Canada, as well as via www.allstate.com and 1-800 Allstate®.