Capital One’s Rules Of The Road Survey Reveals Lack of Parental Guidance and Credit Awareness in First Car-Buying Experience

For many new graduates, getting a diploma and getting a new car are rights of passage that go hand in hand. However, according to the Sixth Annual Rules of the Road Survey by Capital One Auto Finance, a subsidiary of Capital One Financial Corporation (NYSE:COF), many young adults will be making the largest purchase of their lives without parental advice and devoid of basic financial information like their credit score.

As young adults prepare for this important first purchase, the Capital One Auto Finance survey found that many young people are navigating the car-buying process by themselves, with more than half of those surveyed (52 percent) reporting that their parents have not discussed budgeting for car expenses nor have they discussed auto financing options (64 percent) with them. With so many young adults finding the way on their own, the one piece of advice most baby boomers would offer when purchasing a first car is to do your research, compare prices, and shop around.

“Buying a car is not an intuitive process and it can be intimidating for first time purchasers, especially in such a challenging economic environment,” said Sanjiv Yajnik, President of Capital One Auto Finance. “With the increased focus on the economy and the importance of making smart financial choices, buying a car presents parents a great opportunity to teach their children the importance of creating a budget, selecting the right vehicle and choosing the best financing option for that vehicle.”

Capital One Auto Finance’s survey also compares the expectations of today’s first time car buyers with the experiences of baby boomer parents. Some of the most surprising results show that boomers and today’s young adults aren’t so far apart and that practicality is as important today as it was 30 or 40 years ago. Both groups named price as the most important factor in car buying decisions (49 and 41 percent respectively), and while car prices have increased significantly over the years, it is surprising that the young adults surveyed predict that their first car will cost within the same $1,000 to $5,000 price range that most baby boomers reported paying for their first cars. Not so surprisingly, most young also adults also plan to purchase used vehicles (67 percent).

In terms of paying for their new wheels, 65 percent of today’s young buyers expect to follow in their parents’ footsteps by paying for their first car themselves. Most also report that they plan to pay for their first car in cash (44 percent), up from 29 percent in 2008.