Auto Loans & Transportation for Seniors

As an older driver, you may have notice that driving is a little different compared to your early 20s and 30s. Some things that weren't so important back then are now a must, and vice versa. Regardless of your needs and preferences, there are plenty of financing options available, especially if you have good credit. Keep reading to learn more about the pros and cons of leasing and buying as an older driver, safety features you might want to consider and having access to cars and transportation to maintain your independence if driving is no longer an option for you.

Just like other car buyers, older Americans in the market for a new vehicle have to consider their purchase options: a car loan, a lease or paying cash. What's best for you may depend on several different factors, including your income, how long you intend to keep the car and how much you drive. Learn more about car financing for seniors:

Car loans - from the dealership, the bank or some other financial institution - are the most popular method for paying for a new car. According to Experian, in the first quarter of 2016, more than 85 percent of all new vehicles were financed with an auto loan. Take a look at the pros and cons of getting a car loan if you're an older driver:

• Many seniors have good credit scores, allowing them to qualify for very low interest loans.
• If you're retired and live on a fixed income, you can calculate exactly how much money you have available for monthly payments and limit your purchase to that amount.

• Seniors who don't have a good to excellent credit score may find it difficult to get a good interest rate, which can add thousands of dollars to the price of your vehicle.
• New vehicles quickly depreciate, meaning your car may lose up to half its value in the first three years. If you have to give up driving or change to a different vehicle while you are still paying your loan, you could end up "upside down" or owing more than the car is worth.
• For car loans, many experts say it's best to pay a significant down payment, which might be difficult if you're on a fixed income.
• If you can't secure a good interest rate, it may be difficult to juggle living expenses plus a car loan when on a fixed income.

More and more people are choosing to lease a vehicle these days. According to Experian, over 30 percent of all new vehicle sales were leases in the first quarter of 2016, up from 26 percent in the first quarter of 2015.

But is leasing a good option? It depends on your vehicle preferences and driving habits, says Rhonda Shah, a manager for Traffic Safety Advocacy at AAA. "If you are somebody who likes to drive the latest and greatest model every year or two years and you're not driving a lot of miles, then leasing certainly could be an option," she says. "But you definitely want to be sure you understand the terms of that lease before you enter into any type of agreement."

For seniors, this is how the pros and cons of leasing break down:

• Leases last just a few years. When you're done, you can either start over with a new car and lease or, if necessary, find alternatives to driving.
• Updating your car every few years allows you to take advantage of the latest safety and comfort features, many of which are ideal for senior drivers.
• Leasing a new car every few years will reduce the chances that your car will break down.
• You don't need to pay a big down payment to lease a car. In fact, you might not have to pay a down payment at all. And monthly lease payments tend to be lower than loan payments.
• You don't have to worry about selling your used car down the road. As soon as the lease runs out, you just return the car and walk away.

• If you suddenly have health issues that require you to stop driving all together, getting out of your lease early can be costly.
• If you're retired, you can no longer take a tax deduction on the lease (which you may have done for work reasons in the past).
• Leases come with mileage limits, which on average is only 10,000 per year, according to Edmunds.com. If you have retired and are ready to hit the road and visit friends and family around the country, you can easily surpass the mileage limit, forcing you to pay extra mileage fees.
• Over the long run, leasing several new cars is going to be more expensive than buying one car and driving it for a decade or so.

Paying all cash for your car is usually the cheapest option. But many seniors can't afford this, and even if they can, there are some pros and cons to consider.

• If you pay cash up front, you won't have to worry about monthly payments.
• Over the long run, this is the cheapest way to purchase a new car since you avoid the interest and fees involved in loans and leases.
• Budgeting and preparing for one big purchase can be much easier than budgeting for monthly payments.
• Because you'll own the car outright, you—and not the bank—get to decide how much comprehensive/collision insurance to purchase.

• Paying for a car all at once could put strain on your budget, especially if you're on a fixed income. You'll definitely want to make sure that you still have money left over for monthly living costs.
• As the owner of the car, you'll be responsible for paying for any necessary maintenance and also repairs after your warranty expires.

It's no secret that older drivers may face additional challenges behind the wheel, but an older age alone doesn't necessarily make a person an unsafe driver. According to the Insurance Institute for Highway Safety, older drivers are actually safer than young drivers because they tend to wear their seatbelts, don't speed and don't drink and drive. That's a good start, but there are plenty of additional steps you can take to not only stay safe, but also increase safety. For example:

• AAA's Senior Driving
  AAA offers lots of educational resources for senior drivers online, including basic information about how aging affects driving, safety tips, vehicle features for seniors and an online defensive driving course.

• AARP's Driver Resource Center
  This site is full of information about how aging affects driving ability, and it offers tips on safe driving for seniors.

• CarFit
  This non-profit organization helps seniors assess whether their vehicle "fits" them properly, making sure the driver is able to be as safe and mobile as possible.

• DMV Senior Guide for Safe Driving
  Although this guide is from DMV California, most of the information is relevant to older drivers in any state. Others state DMVs may have a similar guide.

• Disability.gov's Guide to Transportation
  This guide includes helpful links to organizations providing transportation for seniors.

Just like most drivers, seniors look for comfort and safety in a vehicle. And today's vehicles have plenty of features that can be especially helpful for older drivers. AAA's Smart Features for Older Drivers brochure gives you recommendations for advanced car features according to your physical and cognitive needs. In addition to value, AAA suggests seniors consider the following features when shopping for a vehicle:

With these features in mind, here are ten vehicles that earn high marks from Consumer Reports for their accessibility, safety and comfort for seniors:

Source: Consumer Reports, Ten Best Cars for Older Drivers, August 2014

Getting older doesn't necessarily mean you should stop driving. "Just because someone is 75, 85 or even 95 years old does not mean that their ability to drive safely has been compromised," says Shah. "Drivers age differently and at their own pace." Still, as you get older, it's important to regularly assess your ability to stay safe on the road and to be aware of your limitations.

Safety experts suggest that if you - or a loved one - experience any of the following warning signs, it may be time to find alternative transportation options:

Source: California DMV's Senior Guide for Save Driving and ADED Aging and Driving Fact Sheet

If you are concerned about your ability to drive safely, make an appointment with a driver rehabilitation specialist. These professionals conduct evaluations and offer recommendations for improving safety behind the wheel or giving up the keys altogether. You can search for one in your area through The Association for Driver Rehabilitation Specialists.

Many older drivers are reluctant to stop driving because they don't want to lose their independence. However, if you're worried about a friend or family member when he or she is behind the wheel, it's a good idea to voice your concerns and even discuss potential remedies. Here are some tips from experts for how to talk with your loved ones about giving up driving:

• Educate yourself first
  Learn about the possible red flags for older drivers, then speak up when you see something that causes concern. Stay respectful and avoid making accusations.

• Talk with them as early as possible
  Begin talking with your loved ones about safe driving before there are health concerns about driving. This way you can keep an open dialogue and discuss how you will both know when it's time to stop driving. This should make later discussions easier and allow your loved one to get support, such as a driver's safety course, and/or begin considering alternative transportation options.

• Suggest a self-assessment
  You can give your loved one this AAA self-assessment for drivers over 65. It asks 15 questions and offers advice for becoming a safer driver.

• Check medications
  Certain medications can hamper driving ability. AAA offers a tool that allows you to look up the potential impact of medications while driving. Or you consult your pharmacist.

• Help make driving easier
  Suggest that your loved one avoid potentially dangerous situations, such as nighttime driving or high traffic hours. You can also suggest routes with fewer dangerous intersections and left-hand turns, offer to give her/him a ride occasionally or set her/him up with a volunteer ride service.

Eventually, many seniors stop driving because it's too difficult, dangerous or stressful. In fact, AARP reports that about 20 percent of Americans over age 65 don't drive at all. Fortunately, there have never been more transportation options for seniors. Here are just a few you and your loved one can try:

• Paratransit services
  Often run by non-profit organizations, paratransit services use vans or small buses that provide door-to-door transportation to elderly and disabled passengers. You may need to make a reservation, but these services are much more personalized than public transportation and are equipped to handle the special physical needs of their passengers. There's often a small charge or a request for a donation.

• Volunteer driver programs
  Non-profit organizations often recruit volunteers to drive seniors to appointments, social outings or shopping trips. Depending on the specific program and where you live, these services are provided free, on a donation basis, through membership dues or for a minimal fee.

• Public transportation
  Most public bus and subway systems offer discounted tickets or free rides for seniors and can accommodate elderly riders with elevators and lifts.

• Taxis or ridesharing companies
  Although this option is usually more expensive than public transportation or volunteer programs, it offers maximum flexibility. Some taxis and rideshares are wheelchair accessible, and some accept transportation vouchers from local area agencies on aging.

• Friends and family
  Often the most pleasant and least expensive option is to ask a friend or family member for a ride. While this may not be feasible for daily errands, many seniors rely on their family and friends to take them on weekly shopping trips, doctor's appointments or social events.

To find transportation resources near you, try the following resources:

• Independent Transportation Network
• National Association of Area Agencies on Aging
• Eldercare Locator

If you're a caregiver responsible for driving a relative or client around, your passengers may need–or at least appreciate–the following vehicle features: