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The deal I had with each of my 4 was that when they turned 16, I'd match whatever they had saved towards a car. My parents ended up jumping in and matching the same amount, so they effectively had to save 1/3 of what they would end up spending. I paid for their insurance, but if they wanted a car they better start saving their xmas and bday money and save something from their summer jobs. My average kid maybe had saved $1500 so they weren't getting anything special, although my one practical son ended up with almost 5K, so we ended up putting a cap on how much he could spend (and we would contribute).
I had a friend whose family owned the little local Ford dealership and he'd go to the auction in Mannheim PA with their budget and call with what he thought were good buys and bid on them for us. My oldest son turned 16 in 2001 and he bought a '95 Civic with 120K miles on it from that auction. He drove it for over 11 years before it finally died on him.
While my grandchildren aren't yet old enough to start saving money, my bet is that my kids will do it the same way with theirs.
Alex
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