How Are You Managing a Car for Your College-Aged Child?
Hello Wise Network,
My 20-y-o is in college on the East Coast. She is a motivated, hard-working student who volunteers and works a few hours a week (low pay). Her father and I jointly pay her tuition and basic living expenses so she can focus on her education. She pays for anything beyond that. She's in a position where having a car would be very advantageous for her summer job (also on the East Coast, low-paying but room and board provided) and off-campus housing next year. I'm thinking of buying a new car for myself and having her drive my current car (not looking for input on this).
I'm trying to get my head around titling the car in her name vs keeping it in mine, registering it in CA vs VA, and insuring her under my CA policy vs taking out a policy in her name in VA. I'm also thinking about what expenses to have her pay—gas (for sure), maintenance, registration, insurance.
I'm curious: what are others in similar situations doing?
Parent Replies
You should look into the VA vehicle registration laws. When I moved to VA right after college I discovered that vehicles parked in VA for 30 consecutive days had to be registered in VA. There might be an exemption for college students but you should check. I also found out that VA did not have AAA insurance so I had to get my own. For my current recent college graduate child, in CA, I continue to pay all her vehicle expenses because she’s not quite ready for that burden yet.
We let our daughter use one of our cars when she was in college in WA. We kept the title in our names and continued to have her on our insurance, as we didn't know where she would go after college and whether or not she would need the car then. She paid for gas. After she graduated, it made sense for her to keep the car, so she took over and registered it in her name, got her own insurance, and pays all expenses.
Both our sons were similar -- east coast colleges, responsible kids, we paid tuition, they did the rest. We had a car (10 years old) here that they used during high school, which we shipped there (Boston). We kept it titled and insured in our names here (cheaper, even with car shipping). We paid insurance, they paid for gas and any increase in insurance if their driving caused an increase (always our deal with them). Worked out fine. Only issue was getting older son's car re-registered, as only CA smog shop could certify it passed smog test and car was in Boston. Re-registration came up around the time he graduated, and we would have liked to re-register and pass it on to younger son who was just starting college. But we couldn't get there from here. So we sold the car there and did the exercise again when younger son moved off campus junior year (shipped my then old car, got a new one -- lucky me!). Lesson -- if you opt to keep car in your name and registered here, make sure smog is tecent enough it won't become an issue for re-registration.
Each of our kids had a car of ours to use in college out of state. We held the title, and we paid insurance on our plan with the car's address being where our kids' lived. I think because the kids' permanent address was still our address, it wasn't an issue. You can call your insurance company to get your options and costs. We paid for everything (maintenance, registration, and insurance) except gas until they were out of college, had jobs, etc. We gave each kid their car eventually by transferring ownership to them, then they got it registered in their state, took on insurance, etc.
We're on the title jointly with our kids for both of our 20-somethings' cars and they're on our insurance policy. A car has been super useful for our college kid for summer jobs and living a bit far from campus. He's been paying a lot of his own expenses during college with his summer earnings and part time school year jobs, so we don't mind paying his car insurance, registration, and maintenance and helping him a bit with gas (e.g. so he can come home!) Once he is out of college and working we will expect him to pick up his own car expenses like our older kid. With that one we're on the title because we co-signed a loan for the car so then we were required to put it on our insurance, he is supposed to pay his share of this.