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New Study: Generation Gap On Auto Ownership Is as Wide as a Highway

Teens say they're ready for car ownership, while parents disagree. The reason, a new study from American Honda Finance Corp. reveals, will make Baby Boomers shake their heads.

by Staff
May 16, 2017
New Study: Generation Gap On Auto Ownership Is as Wide as a Highway

 

3 min to read


COLORADO SPRINGS, Colo. — Teens ages 15 to 17 are confident they full understand the financial responsibilities of owning a car, a new study shows. Unfortunately, 85% of parents of those 15- to 17-year-old teens disagree.

The discord, according to independent research conducted for Junior Achievement and American Honda Finance Corp., may lie in the fact that 86% of teens feel that parents should help them with automobile expenses such as insurance, repairs and gas. Unfortunately for teens, however, 91% of parents believe assistance is unreasonable.

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"When it comes to newly licensed drivers, in addition to important discussions about distractions and curfews, parents should rev up the car talk about the financial aspects of car ownership," said Jack E. Kosakowski, president and CEO of Junior Achievement USA. "It's a great way to prepare them for future financial security both on and off the road."

The Junior Achievement Surveys were conducted by Wakefield Research between Feb. 8 and Feb. 21 using an email invitation and an online survey. Polled were 500 teens ages 15 to 17, 500 young adults ages 18 to 25, and 500 parents with teens ages 15 to 17.

Results revealed that nearly one-fourth of teens expect a car with their cap and gown on gradation day, while 61% of parents surveyed at the time said they expect their teen to complain about financial upkeep of a car within 30 days of getting their vehicle.

Interestingly, 61% of parents say a car is a more effective means of teaching kids financial responsibility than a credit card. To that end, 96% of parents say they would only help their teen buy a car if they first demonstrated responsibility, such as by preparing a budget to pay for expected and unexpected expenses, having a certain amount of money saved or explaining what is required to buy a car.

"When parents walk their young adult drivers through the smart steps of buying and maintaining a car, it becomes an opportune time to introduce key financial concepts that will last a lifetime, from the importance of budgeting, to negotiating and maintaining healthy credit," said personal finance expert Farnoosh Torabi, who provides 10 tips for financially-sound teen drivers.

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A third JA-AHFC survey conducted among young adults ages 18-25 may reveal the truth about teens' financial understanding. According to this more mature cohort, looking in the rearview mirror, 73% admit they did not understand the financial responsibilities of owning a car when they were in high school.

And with age comes wisdom, as 93% of these young adults are confident that they fully understand the financial responsibilities of owning a car. And result show they turn to a wide variety of sources for information when considering purchasing a vehicle, including financial institutions, car dealers, online forums, magazines and social media.

"Vehicle ownership is often a teen's first real-world experience managing their own money," said David Paul, senior vice president of American Honda Finance Corp. "The important lessons learned at this stage in their lives will help them manage their responsibilities today, as well as help them succeed in their future financial obligations and aspirations in life."

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