Personal Finance ©2012
Home and Motor Vehicle Insurance
NAF Case Study
Plan Your Financial Life (National Academy Foundation)
Tom just turned 16, and he wants a car more than anything else. Since Tom had only been working for three weeks at the local hamburger hangout, he hasnt saved enough money for a car. His parents arent in the position to buy him one. Besides, they keep telling him that the expenses that go along with a car like insurance, gas, oil, and maintenance are very costly. However, Tom thinks he has it all figured out. Several of his friends have cars, so he will just borrow theirs! He will pay for the gas he uses. His friends seem OK with this idea.
Do you think friends should share their cars with Tom? Would you loan your car to Tom? Explain why or why not. If you were his parents, would you let Tom borrow his friends cars? What problems could occur? Research an automobile insurance policy and find out what coverages are in place when someone borrows a car.