Capital One's Rules Of The Road Survey Highlights Generational Differences Between...

Capital One's Rules Of The Road Survey Highlights Generational Differences Between Baby Boomers and Today's First-Time Car Buyers

Parents' advice: "Do your research, compare prices, and shop
around!"
MCLEAN, Va.--(Business Wire)--
As summer approaches and school is almost out, many young adults
are preparing to make the single largest purchase of their lives -
their first car. In its 5th annual Rules of the Road survey, Capital
One Financial Corporation (NYSE:COF) asked first-time buyers what they
expect to experience - and then surveyed their parents, who bought
their first cars three and four decades ago.

While the survey revealed generational differences, it also
revealed that parents and young adults value the same things in a car
- freedom, having transportation, and the pride of ownership. And
although many Baby Boomer parents admit that they did not do much
research prior to their first car purchase, 29 percent say doing
research, comparing prices and shopping around is the most important
advice they would offer first-time buyers.

"Parents can play a key role in guiding young adults as they
embark upon their first car purchase," said Steve Schooff of Capital
One Auto Finance. "Talking with your young adults about doing their
homework is important. Researching vehicles, learning about pricing,
and arranging financing are all steps that every first-time buyer
should understand."

However, with a fluctuating economy and the average price of gas
reaching nearly $4, differences arise when it comes to aesthetics. For
10 percent of Boomers, the look and style of their first car was what
they loved the most. Today, only four (4) percent of young adults are
excited about the look and style of their first car; most are
interested in purchasing cars known for their fuel efficiency and
reliability. Not surprisingly, Baby Boomers paid much less for their
first car than today's young adults. Seventy-three (73) percent report
that their first car cost less than $5,000, while the majority of
today's younger buyers (37 percent) expect to pay $10,000-$25,000 for
their first vehicle.

With prices so dramatically different, it's easy to understand why
most boomers (65 percent) paid cash for their first car. Financing
options also were limited for boomers, with only 17 percent financing
their first car through their bank. Today, almost half (41 percent) of
young adults plan to finance their car through the bank and 29 percent
will pay cash. This number is an increase from 2007 when only 29
percent planned to finance through their bank and 40 percent were
paying with cash.

Jack R. Nerad, executive editorial director and executive market
analyst for Kelley Blue Book and kbb.com, says that first-time car
buyers are dealing with a lot more than just a car's choice and price.

"Buying a car today is not the same experience as in the past, and
it's not just because of rising fuel prices. Not only are today's cars
much more expensive, but first-time car buyers 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 young adults to take the time to
understand exactly what a car loan is, how much they can afford 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.

-- Learn about vehicle pricing. Research new and used car prices
including dealer invoice pricing and transaction costs (the
Internet can be a great resource). Know what you can afford
and use those target numbers as a reference point for your
pricing information.

-- Research and compare different financing options. There is a
range of auto financing options available, including dealer
financing, loans from banks and credit unions, and
pre-approved no-obligation online loans. Researching your
options and finding the lowest rate that you qualify for can
save you a substantial amount of money over the life of your
loan. It's also critical that first-time buyers match the
length of their loan to the planned length of ownership so
that they do not become "upside down."

-- Treat the car-buying process as two separate negotiations.
Determining the: 1) vehicle price, and 2) financing are two
separate transactions, and you should negotiate each
separately. This strategy will often help you save money. (If
you happen to have a trade-in, consider it a third part of the
negotiation.)

-- Check your credit rating. Don't assume your young adult does
not have a credit history. Some parents have made their older
kids authorized users of credit cards and cell phones, so it's
important to obtain a credit report to make sure the
information is accurate before buying.

-- Make sure you are comfortable with the contract. If it's not
the price or deal you want, be ready to walk away.

"Education and exploring your options are the keys to ensuring you
get the best possible deal on a car," added Schooff. "It's also
important that today's young adults take the time to do their research
and shop around, both for the car they will buy, and to understand
their payment options."

Financial Education Help

Capital One offers car buyers a range of information and tools to
educate themselves, including a free, easy-to-understand consumer auto
buying guide available at www.capitalone.com/autoloans. The guide's
topics range from budgeting, to learning about vehicle research and
shopping, to understanding financing and payment terms.

Survey Methodology

The findings reported in this release are from an online survey
conducted by the survey opinion research firm, Braun Research of
Princeton NJ. Braun Research completed interviews with 403 parents who
themselves are between 45 and 55 years of age, all of whom own a motor
vehicle. In addition, Braun Research conducted 177 interviews with
young adults age 18 and 23 who are planning to obtain their first
motor vehicle in the next year. The interviews were conducted between
April 25th through April 29th, 2008. The margin of error for this
study is +/- 4.89 percentage points for the parents and +/- 7.3
percentage points (at the 95% confidence level) for the young adults.

Sampling for this study was conducted using a national random
sample. All panelists were invited to participate in the panel by
invitation only. Statistical weights were designed from United States
Census Bureau statistics.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a
financial holding company whose subsidiaries collectively had $87.7
billion in deposits and $148.0 billion in managed loans outstanding as
of March 31, 2008. Headquartered in McLean, Va., Capital One has 745
locations in New York, New Jersey, Connecticut, Texas and Louisiana.
It is a diversified bank whose principal subsidiaries, Capital One,
N.A., Capital One Bank (USA), N. A., and Capital One Auto Finance,
Inc., offer a broad spectrum of financial products and services to
consumers, small businesses and commercial clients. A Fortune 500
company, Capital One trades on the New York Stock Exchange under the
symbol "COF" and is included in the S&P 100 index.

About Kelley Blue Book (www.kbb.com/sitemap)

Since 1926, Kelley Blue Book, The Trusted Resource(R), has
provided vehicle buyers and sellers with the new and used vehicle
information they need to accomplish their goals with confidence. The
company's top-rated Web site, kbb.com, provides the most up-to-date
pricing and values, including the New Car Blue Book(R) Value, which
reveals what people actually are paying for new cars. The company also
reports vehicle pricing and values via products and services,
including software products and the famous Blue Book(R) Official
Guide. Kbb.com is rated the No. 1 automotive information site by
Nielsen//NetRatings and the most visited auto site by J.D. Power and
Associates nine years in a row. No other medium reaches more in-market
vehicle shoppers than kbb.com; nearly one in every three American car
buyers performs their research on kbb.com.

Capital One Financial Corporation
Steve Schooff, 972.378.8105
stephen.schooff@capitalone.com

Copyright Business Wire 2008