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A new study asked teenagers about the costs of owning and maintaining a car. The researchers found teens have a lot to learn.
“Everyone gets a car for graduation, Mom and Dad! Everyone!”
If you’ve been hearing that claim from your soon-to-be graduate, you can now offer a scientifically backed retort.
In fact, only about one-third (34%) of teens expect to get a car, truck, or money toward a vehicle as a graduation present, according to a new survey of teens from Junior Achievement USA and American Honda Finance Corp. (AHFC).
Of course, dentists may be in a better position than most when it comes to shelling out the money needed to buy their teen a car. But sticker price is only one portion of the cost of getting a car.
As for ongoing maintenance costs? The survey also found most teens are clueless.
AAA estimates that on average, Americans pay $725 per month in car loan payments, fuel, insurance, and maintenance. Not surprisingly, Junior Achievement and AHFC found most teens were blissfully unaware of that hard truth.
Only 14% of the 1,000 teens surveyed correctly identified the cost of ownership in the survey, despite the fact that 54% said they have spoken to their parents about the cost of owning a car.
“Most young drivers really don’t understand the ongoing costs of vehicle ownership, and this can result in decisions that have future financial implications,” said Jack Kosakowski, president and CEO of Junior Achievement USA. “It’s important that parents have these conversations with their teens so that they can avoid putting their credit in harm’s way.”
Of course, whether or not it’s a good idea to buy a teen a car is a matter of opinion. Some parents prefer to encourage their children to save up to buy their own car, on the theory that it will make the teenager more financially independent. Others are more concerned with ensuring their child has a safe and reliable mode of transportation, which many interpret as a new or gently used car.
If you’re considering buying a car for your teen, Junior Achievement and AHFC have set up a website intended to educate teens about the costs of having a car. It’s available at FinancialTestDrive.org.