Parents to teens: "Do your research, do your homework, and shop around!"

MCLEAN, Va.--(BUSINESS WIRE)--June 14, 2007--Heading into days of summer, teens and young adults all over the country are preparing to make the single largest purchase of their young lives - their first car. In its annual Rules of the Road survey, Capital One Financial Corporation (NYSE:COF) asked them what they expect to experience - and then surveyed their parents, who bought their first cars three and four decades ago. Asking these 'older, wiser' car buyers about their first car-buying experiences evoked memories and advice for first-time car buyers today.

"Buying your first car is an exciting right of passage, but for many young adults, it's the first major financial decision of their lives," says Steve Schooff, spokesperson for Capital One. "Whether or not they contribute financially to the purchase, parents' experiences play an important role by helping their teens educate themselves and prepare for the transaction."

Advice from Mom and Pop

Although Mom and Dad admit to spending very little time researching their first car purchase, the most oft-quoted advice these baby boomers had for first-time car buyers today was, "Do your research, compare prices, and shop around." In fact, over a quarter (27 percent) of respondents said this would be their best piece of advice to today's first-time buyers. When teens were asked what advice they would most like to receive, 41 percent said they would want to hear, "How to do research, shop around, and where to buy a good, reliable car."

Sweet Nostalgia for the Classics...at Ten Times the Price

The survey results had a twinge of nostalgia for days gone by, like in 1972, when you could buy a car for less than one thousand dollars - a time when gasoline only cost $1.28 per gallon. The most popular first cars back then were all American - 50 percent of baby boomers said their first car was a Chevy or a Ford - the most popular: the Ford Mustang (1966) and Chevy Impala (1966-68). The Honda Civic, Honda Accord and Toyota Camry were the most popular among today's teens.

The survey also looked at what has changed in a generation in terms of financing a first-car purchase. The most dramatic difference, of course, is in the price of cars themselves. Most baby boomers (73 percent) said they paid less than $5,000 for their first car, with 40 percent paying less than $1,000. In contrast, 40 percent of teens today are saying they expect their first car to cost more than $10,000 - more than 10 times the amount their parents paid.

With prices so dramatically different, it is plain to see why most boomers (60 percent) say they paid cash. Financing options were slimmer back then and half of the respondents said they either did not have financing available to them, or their only other option was to borrow money from their parents. Only a small percentage (18 percent) remember having the option to finance through a bank or credit union. Today, more than half (57 percent) of teens surveyed said they are planning to finance the purchase of their first car.

Kelley Blue Book Consumer Advice Editor Jack Nerad says that first-time car buyers are dealing with a lot more than just a car's choice and price.

"Buying a car for the first time today involves many more variables than decades passed. Today's buyers also must navigate a sea of financing options and take out a car loan for the first time," says Nerad. "The good news is there are more financing options than ever before, but it is important for teens to take the time to understand exactly what a car loan is and shop around to understand what they are paying for and whether they are getting the best possible deal."

What Should First-Time Car Buyers Do To Get The Best Deal?

Capital One and Kelley Blue Book compiled a set of tips to give first-time car buyers the knowledge and confidence they need to manage the car-buying process - from choosing the right car to finding the right financing.