Buying a first car is a milestone for most teenagers, but for 17-year-old Beto in Atlanta, it quickly became a financial headache. On a recent episode of "The Ramsey Show," he called in to share the struggles that came after purchasing his 2012 Honda Accord.
The Costs Add Up Quickly
Beto bought the car from a friend for $8,000 and agreed to pay $400 a month. But he quickly realized the costs didn't stop there. Insurance for a teen driver is steep, running roughly $700 a month just for liability.
"The part that's getting me is the insurance," Beto told hosts Rachel Cruze and Jade Warshaw.
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On top of that, transferring the title to his mother's name added a one-time cost of about $700, and minor repairs necessary before registering the vehicle would cost another $350. For a 17-year-old earning $850 every two weeks working full-time at an MMA gym, the bills added up fast.
Facing the Reality of Debt
Both Cruze and Warshaw were quick to point out the financial strain.
"Debt will always set you up in the negative," Cruze said. "It always will. Financially, emotionally, your stress, everything. And I think you’re kind of getting a glimpse of that, but I’m kind of glad you’re getting a taste of it at $8,000 for a stupid car loan vs a $40,000 business loan at 25."
Beto had tried to manage on his own. He lives with his mother, contributing where he can and said he is financially independent. But even with a full-time job, the costs were overwhelming.
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Side Hustles as a Solution
The hosts suggested that Beto could consider a side hustle to supplement his income. He had lined up a new full-time job at an orthopedic clinic, earning $20 an hour for 40 hours a week. Cruze asked if he could keep working at the MMA gym in the evenings, but Beto said the hours conflicted with his new job.
Warshaw recommended a flexible side gig instead — such as food delivery or another part-time job — that could fit around his schedule and help cover car costs without overwhelming him.
Thinking About Future Plans
Beto also asked about starting a car detailing business. Cruze encouraged him to price out costs and potential earnings before diving in. "You may find out, ‘Oh my gosh, this is pretty incredible, I only have to put in $500 and I'm making thousands a month,'" she said.
But she added that it might be smarter to wait until the car was paid off so he wouldn't take on additional financial strain with unforeseen expenses.
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Lessons for Teens and Parents
Beto's story serves as a reminder for other teens — and their parents — about the realities of financial responsibility:
- Insurance for young drivers is expensive, sometimes higher than the cost of the car itself.
- One-time fees like title transfers and taxes can be surprisingly steep.
- Side hustles can help bridge the gap when expenses exceed income.
- Debt brings stress even for hardworking young earners.
Beto's experience illustrates that even small financial decisions can have big consequences. With careful budgeting, extra income, and patience, he can turn this first car into a learning experience rather than a long-term financial burden.
"I hate that you’re in the situation," Cruze said. "But I really do think with putting some of these jobs kind of together, making some more money, and really being focused right now, I think you’re going to get out ahead on it."
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