Question on 21 year old buying a car

[paulsharvey]

At 21, it sounds like he can buy anything they will fiance. You can advise some, but even that, at this point, probably should be reserved for when requested by him.

No idea on quality, but Mitsubishi had some Very affordable compact cars, new, available. Mirage? Lancer? Like $16k, brand new, with warranty, 2024 models.

But, hes grown, and not just barely, grown grown, so I would only offer advice if asked

 

[paulsharvey]

He "might" need to look at more than one bank. Our credit union, my 19 y/o son can't have a solo account until 24, which is complete BS, IMO, but there are plenty of banks that, with credit, will absolutely treat an 18 y/o or 21 y/o as an adult

 

[LouNY]

As I recall as a young Marine that financing a vehicle was quite easy. Especially at those thieves right outside the gate. They knew that a simple phone call to a Marines command would get immediate attention. I was fortunate enough to have my vehicles before I enlisted and to buy at a good price when others were getting rotated out.
I did have the misfortune to get involved with a couple of younger men at my last duty station at Cherry Point that got screwed by shysters, it was not nice seeing them being called in front of the 1st Sargent and one even had to see the CO before getting an automatic deduct from their salary.

 

[paulsharvey]

So, for the son, I would rather pay 15% interest on my own, then 8% with a parent co-signing.

Is he trading in the old vehicle? It sounds like he can pretty easily do 20%+ down. Even if he had the cash and trade value to not fiance; I would still fiance for 5 years. Get the incentives for using their preferred leanding partner, and after 6 months, if it makes since, pay it off; or dont.

 

[kenmac]

It's been so long since I've financed anything other than my home, I couldn't tell you what interest rates are on vehicles. I did try to finance my 2024 Kawsaki mule profxt (3.99%) but they denied my application even though I had a high credit score LOL

 

[ultrarunner]

Finance is a profit center and it can be more than the vehicle sold.

Growing up around the car business we would have mostly Navy come in to buy and opted for clean used and avoided finance.

I’m guessing rust free used doesn’t apply where you are?

I’ve never had a car loan going back to age 13 and same for the folks, etc. mostly because it makes it easy to get upside down on value in addition to paying twice for the car with some of the dealer rates and long terms common today.

Credit Unions often have straight forward auto loans for those going that route.

Most of the single military guys just need wheels and the smart ones sock away as much pay as possible to build a nest egg and buy for cash…

Can’t comment on all the offerings with CVT transmissions but older non CVT Toyotas in rust free states just run and run…

What about a lease return?

 

[Sigarms]

As I recall as a young Marine that financing a vehicle was quite easy. Especially at those thieves right outside the gate. They knew that a simple phone call to a Marines command would get immediate attention. I was fortunate enough to have my vehicles before I enlisted and to buy at a good price when others were getting rotated out.
I did have the misfortune to get involved with a couple of younger men at my last duty station at Cherry Point that got screwed by shysters, it was not nice seeing them being called in front of the 1st Sargent and one even had to see the CO before getting an automatic deduct from their salary.

I have to laugh. They pretty much warn the guys on base about used car lots just outside the gates.
That said, car salesmen pretty much has ruined the sales profession no matter where you live LOL (somewhat joking and no offense meant to anyone into selling cars).

Like anything else, good people and bad people people in every career choice.

 

[Yander]

Lenders do not trust anyone for whom they cannot see a payment trail. Their actuaries need to see payment history, not just on a CC. They will give you a loan without having had it if he is employed with adequate income, but it may not be the best rate.

Unfortunately, car rates went crazy for a while, and that is why I held off on buying another truck after totaling mine.

I would maybe advise him to buy a $10k car he can finance and put a nice down payment on it to make the actuaries happy and get the best rate. At this point, it isn't just about securing a car but also establishing a payment history without giving the bank 8% interest on your hard-earned cash. 8% interest on $10k is better than on $25k. Then, when rates come down a little more, they start to, and he sells the $10k car and buys the car he wants.

Getting strapped to a large car payment could also affect some of his career choices when he gets out. If he decideds to continue with any college or schooling, large car payments are not ideal.

 

[Sigarms]

Lenders do not trust anyone for whom they cannot see a payment trail. Their actuaries need to see payment history, not just on a CC. They will give you a loan without having had it if he is employed with adequate income, but it may not be the best rate.

Unfortunately, car rates went crazy for a while, and that is why I held off on buying another truck after totaling mine.

I would maybe advise him to buy a $10k car he can finance and put a nice down payment on it to make the actuaries happy and get the best rate. At this point, it isn't just about securing a car but also establishing a payment history without giving the bank 8% interest on your hard-earned cash. 8% interest on $10k is better than on $25k. Then, when rates come down a little more, they start to, and he sells the $10k car and buys the car he wants.

Getting strapped to a large car payment could also affect some of his career choices when he gets out. If he decideds to continue with any college or schooling, large car payments are not ideal.

Keep in mind, he's already bought 2 cars at a around a 10K price.

He'd rather go with something more "practical" but with mileage under 30K on the odometer. That raises the price point substantially.

When he bought a Mercedes when he hit 16 or 17, he paid outright for it with cash he earned working. I thought it was a mistake, but he earned that right to make that choice IMO. He learned pretty quickly that although he could do some work on the car, it was hard on him due to the brand and pricing of parts for the car, and finding a good mechanic that could work on that brand car wasn't cheap (good learning experience).

The mustang would not have been my first choice for a second car, but he was able to trade in the Mercedes for the the V6 ford. Although the car had a clean history and was a one owner car, it did have 110k on the odometer, shortly after buying it he did have a couple of somewhat expensive repairs to be made that required a lift that he couldn't do the work himself.

He's taking some college classes now online as he sees it's a way to better himself in the Military now. Hopefully if he decides to get out after his first 6 years, his college will be taken care of by the military as he pointed out to me.

As I told my son, he's not getting back to his duty station here in the US until early summer time next year, so bank his money now and look at the car when he is getting closer to coming back.