I have gone through the same with a couple of my kids now and having been in the car business for a number of years, I can assure you that there are some very real reality checks that need to happen as you discuss this subject with your child.

First and foremost, and not to overstate the obvious, is the question of how do you plan on paying for the car? Of course, if you're the type of parent who has the financial means and is going to just buy the car for your child, then you probably would have no need for this article. But, for those of us who firmly believe that our children should participate and learn these life's lessons, you'll want to read on.

One detail that you want to make sure that you bring home to the thought process of car buying for your son or daughter is that as long as they own the car; they are going to be paying for the car... even if they pay cash. Cars are an expense... they are a monthly hit to everyone's budget... so they'll never really stop paying for the car... and boy don't we know this!

As we know, a vehicle is a constant expense, a constant hit on your budget. So, be sure to hammer home the reality of insurance, gas, oil, maintenance... and oh yes, those things that wear out, break, or otherwise cost big money to get repaired.

For now though let's focus on the price of the car and what to do about that so your son or daughter doesn't make a bad financial decision their very first time out. To keep it simple and to make sure your child starts out in a good financial position in the car, the best rule of thumb is that they put at least 20% down... and ... they do not finance the car for any longer than 48 months.

With finances and budget being very tight with first time young buyers; doing this will help get them into their car in a much better financial position. If they violate these basic parameters they may end up upside down in their car for the entire life of the loan, so stay firm and insist on this as their part of the deal.

A vehicle is not an investment... it is a depreciating asset. So, your young person needs to be sure that they fully understand the magnitude of this monthly expense. And that continually paying for a car that isn't even worth market wise what you owe, is a very bad strategy. I've seen time and time again people that disregard these simple rules find themselves in an uncomfortable financial position when it comes time to trade. So stand your ground on this with your kids.

As you've no doubt been able to determine, this article deals with the premise that the fist time car buyer's car is going to be of the used variety. If you and your first time buyer are looking on the new car side of the lot then there are a whole bunch of other parameters and rules that you must follow... or risk literally spending thousands of dollars too much.

If this is indeed the case for you then head over to my website. Once there, you'll see that I have laid out in very easy to follow form, exactly what you need to do in order to avoid paying thousands too much for a new car. If you follow tips, and advice on my site, you'll be way ahead of the car buying game.