Daniel Steven Jones, of Meadow Road, backed his car into the vehicle in the Vicarage Field car park behind Waitrose on July 12 but drove off without leaving his details.
He pleaded guilty to failing to stop at the scene of an accident and driving
with no insurance when he appeared before magistrates in Eastbourne on Wednesday.
The 22-year-old also admitted stealing a bike worth £240 and possessing a small amount of cannabis having been arrested for both offences in August.
Sharon Howard, prosecuting, said the schoolchildren saw Jones's car 'reverse and make contact with a small, red car'.
She said, "It made a very loud bang. The defendant drove really fast out of the car park and didn't stop.
"The paintwork on the other car was scratched and there was a chunk taken out of it."
The court heard the youngsters, aged 12 or 13, noted down Jones's registration number and tracked down the damaged car's owner in a nearby Indian restaurant.
Jones admitted to police the car was owned by his girlfriend and he was not insured to drive it.
He said he knew he 'had hit something' but 'assumed it was a fence' which he had been parked close to.
He apologised to officers and offered to pay for the damage caused.
Tara Celikoz, defending, said Jones accepted his actions were 'utterly irresponsible'.
She said, "He believed he had backed into something but thought it was a fence.
"His record is unattractive but he is 22 years old and is still young.
"He tells me that since the birth of his new daughter he is trying to change his behaviour."
Magistrates ordered Jones to pay £300 compensation and slapped 10 penalty points on his driving record.
For the bike theft and cannabis possession, Jones was given a 12-month conditional discharge.
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