This Quiz Will Tell Your Teen if They’re Financially Ready to Own a Car

Q: How can I tell if my teen is financially ready to own a car?

Look for consistent budgeting habits, savings for down payments and unexpected repairs, knowledge of insurance costs, and the ability to contribute to ongoing expenses like fuel and maintenance.

Q: What expenses should teens plan for when buying their first car?

Key expenses include the purchase price or monthly loan payments, insurance premiums, registration, fuel, routine maintenance, and occasional repairs.

Q: Should parents pay for a teen’s car insurance and upkeep?

Many parents choose to help initially, but setting expectations for teen contributions or shared responsibility helps teach money management and encourages responsible vehicle use.

Q: Are there tools to help teens evaluate their car-readiness?

Yes. Online quizzes and budgeting tools can assess knowledge of loans, insurance, and maintenance costs, helping teens identify gaps before committing to ownership.

Q: How can teens lower the cost of owning a first car?

Choose an affordable, reliable vehicle, compare insurance quotes, keep good driving records to reduce premiums, perform basic maintenance, and use apps to find cheaper fuel.

Published by

Clara

Dec 17

When it comes to deciding whether adolescents are financially prepared to own a car, the two groups often seem to be driving in different directions.

Junior Achievement and the American Honda Finance Corp. recently polled 500 teens ages 15 to 17 and 500 parents of teens in that same age bracket to evaluate the monetary readiness of young drivers. The results were telling:

76% of teens said they grasped the financial responsibilities tied to owning a vehicle, while 85% of parents did not agree.

61% of parents believed their teens would complain about car-related bills within a month of getting a vehicle.

A strong majority of parents (91%) felt it would be unreasonable to regularly cover costs like fuel, insurance and repairs for their teens. That view contrasts with teens’ expectations, as 86% of teens surveyed anticipated their parents would chip in for recurring expenses such as insurance, gas and occasional fixes.

61% of parents surveyed thought owning a car would teach teens more about money management than having a credit card.

Nearly all parents (96%) said they would help their child purchase a car if the teen demonstrated responsibility — for example by budgeting for expenses and saving ahead of time.

Jack Kosakowski, president and CEO of Junior Achievement USA, said parents should be sure to include financial conversations about car ownership when they discuss rules like curfews and distracted driving with newly licensed teens.

To measure young drivers’ money-management aptitude regarding cars, Junior Achievement and American Honda Finance developed an online quiz named Financial Test Drive. Teens can evaluate their readiness for topics related to buying a first vehicle, including the auto loan process, car insurance and maintenance needs.

Personal finance commentator Farnoosh Torabi also supplied Junior Achievement with 10 pointers for financially responsible teen drivers. Among her suggestions, Torabi advised teens to obtain multiple insurance quotes before picking a provider, set up automated payments, and use free apps to locate the cheapest gas.

Hopefully, the nearly one-quarter of teens surveyed who expect a car as a graduation present will weigh all of that advice and plan accordingly — including considering what kind of vehicle makes sense for a student. For families researching options, you might also look into best cars for college students to find practical, budget-friendly choices.

Alyssa Meyer is a staff writer at Savinly. As a teenager, she didn’t fully appreciate just how costly owning a car could be.