This Quiz Will Tell Your Teen if They’re Financially Ready to Own a Car
Do teens and their parents ever see eye to eye?
When it comes to determining whether teens are financially ready to have a car, it seems they are on completely opposite sides of the road.
Junior Achievement and the American Honda Finance Corp. recently surveyed 500 teens ages 15 to 17 and 500 parents of teens in the same age group to assess the financial readiness of young drivers. The findings:
- 76% of the teens said they understood the financial responsibilities involved with having a car, but 85% of parents disagreed.
- 61% of parents thought their teens would gripe about car-related expenses within a month of getting a vehicle.
- An overwhelming majority of parents (91%) said helping their teens out with costs like gas, insurance and repairs would be unreasonable. That’s another standpoint on which parents and teens differ because 86% of teens surveyed expected their parents to contribute to regular expenses like insurance and gas and the occasional repair.
- Though teens and parents disagree on many points, 61% of parents surveyed thought a car would be better at teaching teens about money than having a credit card.
- The vast majority (96%) of parents surveyed said they would help their kid buy a car if they could show they’d be responsible — such as by budgeting for expenses and saving money in advance.
Jack Kosakowski, president and CEO of Junior Achievement USA, said parents should make sure to discuss the financial aspects of car ownership when they talk to newly licensed teens about topics like curfews and distracted driving.
To gauge young drivers’ money management skills when it comes to cars, Junior Achievement and American Honda Finance created an online quiz called Financial Test Drive. Teens can test their financial readiness on topics related to buying your first car such as the car loan process, auto insurance and car maintenance needs.
Personal finance expert Farnoosh Torabi also provided Junior Achievement with 10 tips for financially sound teen drivers. Among them, Torabi recommended teens get multiple car insurance quotes before settling on one company, automate their payments and use free apps to find the most affordable gas.
Hopefully, the nearly one-fourth of teens surveyed who expect a car as a graduation gift will take all that into consideration.
Nicole Dow is a staff writer at The Penny Hoarder. As a teen, she never realized just how expensive having a car could be.