SAN FRANCISCO – Young people are as proficient as ever at analyzing poems and dissecting frogs, says Eric Smith, who, alas, also notes a knowledge-deficiency constant he’s seen as a teacher for more than two decades.

“I’ve seen the level of financial literacy unchanged over the years,” he says. “It’s dismal.”

Such cluelessness can particularly manifest itself during a vehicle purchase and all that goes with it, from knowing enough to match selection to budget and understanding the intricacies of a car loan.

“Financial literacy as a life skill is something you want to have when you are purchasing a $30,000 product on credit,” says Susan Fitzpatrick, Ally Financial’s director-communications.

Smith, a teacher at Glendora High School, east of Los Angeles, seeks to raise the financial literacy rate of his students by teaching a course called “Money Skills.”

It’s a learning program offered to about 550,000 students a year. The American Financial Services Assn. funds it.

“More of education is about what comes next, and that next shouldn’t blindside students,” says Smith who works after hours as the public-address announcer for two L.A. pro sports teams, baseball’s Dodgers and basketball’s Clippers.

He speaks highly of Money Skills during a recent AFSA vehicle finance conference here. He tells of a student who said without programs like it young people are forced to rely on learning financial skills from parents who sometimes are either poor teachers or poor examples because of their cluelessness when it comes to money managing.     

“These students will soon be buying cars and homes, preparing for the future and ultimately be caring for us,” Smith says. “There’s no free lunch, but there’s free financial literacy through Money Skills.”

Ally offers similar outreach programs both online and in classrooms. The target audience is both young and old. It’s typically personal finances 101 for the former and remedial learning for the latter. The goal is to get present and future car consumers up to speed.

“There has been a big push over the past year to promote financial transparency and consumer financial literacy,” Jeff Brown, Ally’s president and CEO-Dealer Financial Services, tells WardsAuto.

Ally this month began offering customers free access to their FICO credit scores as a way for them to better understand their credit situation and how it affects their standing as a potential borrower.

Hyundai and Kia finance units are doing the same thing. They’re the first captive automotive lenders to offer free FICO scores to their customers.

“Our message is to get yourself educated before you walk into the finance and insurance office,” Brown says of Ally’s financial education programs. “Know your credit score and know how your loan rate is tied to it.”

One of the Ally website offerings is a financial IQ quiz.

“Consumers answer seven quick questions to see how much you know,” Fitzgerald says. “People might know their credit score and how it affects their loan rate, but they might not know much about budgeting and saving.”

Brown adds, “A better-educated consumer is a good thing. It’s good for them. It’s good for dealers and it’s good for us.”

How does a lender benefit? For one thing, wise buying decisions can lower the chances of a vehicle repossession, a lose-lose for borrower and lender alike.

“Ultimately, a consumer who understands whether they can take a particular debt load, and makes sure not overextend, ultimately leads to lower credit costs for us,” Brown says.

People generally enjoy the selection aspect of car buying, he says. “But they get a bit nervous on the finance-and-insurance process. We’re trying to take the fear out of the equation. We’re trying to take that nervous energy down by making sure they are better educated.”

The unease often is fear of the unknown.

Brown says: “They wonder, ‘Why am I getting this rate? Why is the F&I person pointing me towards a lease rather than a retail loan? What is the difference between the two.’

“I don’t want to necessarily call it a mystery, but people can and should prepare themselves for what will occur when they walk in that door.”

sfinlay@wardsauto.com