Question on 21 year old buying a car

[paulsharvey]

My mom financed my first truck, and my sisters first car, and the other two kids got free hand-me-down cars, and then eventually she financed them cars too. I know she thought she was helping, but... She would buy them, and we would make monthly payments to her. The problem was, we didnt build any credit history, and she kinda strong armed us into what to buy. Which, yes, she's fiancing, but we paid it.

My first purchase of a new truck, mom consigned for the first year, then then I went to the bank and refinanced into my own name, once I established a bit of credit history. I was 20? 21? some thing like that, but because of the way the first vehicle went, i had zero credit history.

Edit: I know the strong arming was probably from a "looking out" stand point, but for instance, I was looking at a 94, 3.9L, extended cab, 4wd Dakota with maybe 130k miles; i was pretty strongly lead to a 95 2.5L, reg cab, 2wd Dakota. Little brother was looking at an IROC Camaro, and was basically drug by the ear to a 98 Corolla.... was it maybe "smarter" maybe, But, if I had bought the 3.9l, extended, 4wd, I likely would have kept it, rather than upgrade when I got the chance. I know my brother Hated that Corolla... So, you can imagine how he felt about making the monthly payments on a car he didnt want

 

[paulsharvey]

Guess what my point is; the parent might Think they are helping, but actually be in the way trying to help. Sure the kid might make a bad decision, but its their bad decision to make.

 

[ultrarunner]

There may by some attractive lease rates…

This way repairs would be under warranty and you are driving new for the least out of pocket dollars…

Several I work for actually made money as in thousands of dollars when their leases ended 2021-22.

They did the buyout and private party sold.

 

[dougtrr2]

I was married at 19, and my wife and I had some credit struggles early on. In Missouri, where I was stationed, you couldn't even sign for a loan until you were 21.

A couple years later when we were getting ready to have family and the gas shortage hit, we decided that we needed to trade in my 340 Duster for a Toyota Corolla wagon. We had saved up to add to the down payment. When we were finalizing the deal, the salesman was working on submitting the paperwork to the bank they dealt with. We told the salesman that we didn't know if the bank would even consider loaning us money since we had no track record. He laughed and said "Your putting $3,000 down on a $4,000 dollar car. I'll finance you!"

Doug in SW IA

 

[Sigarms]

The only time I ever "asked" for help to buy a car, my Mom put a transferred the purchase price into an account at the Credit Union and I used that as collateral for the loan instead of the car. Typically the Credit Unions will give you a 2 percent increase over the cost (* what they pay you for interest) on that money. So if a CD is paying 4 percent, then you can borrow against it for 6 percent. My sister borrowed her last roof replacement from Mom this way. It doesn't protect the money if the person paying the loan defaults, but it does keep you from co-signing the loan and gets a lot better interest rate.
David from jax

Interesting...

 

[Sigarms]

Guess what my point is; the parent might Think they are helping, but actually be in the way trying to help. Sure the kid might make a bad decision, but its their bad decision to make.

I completely agree with you.

I've tried my best to treat my boys the exact same way my parents treated me.

Both of my boys bought their own vehicles, both with their own money.

No different than the way my parents treated me

However, my parents saved to the point that they didn't want me paying interest if I had to do a auto loan when I was a young man looking for a vehicle. I'd doing to the same thing for my son.

Son made a mistake with the Mercedes he bought with his own hard earned money. He made a mistake IMO on the mustang, but he paid for it.

I'm just happy that he might have seen the errors he made and now wants a more practical car. I have NO doubt he would pay the loan back if I co signed, so if he wants a practical car, I will co sign if he asks, and if he doesn't want me to co sign, I won't.

He's doing better than me when I was at age 21, so I'll give him the benefit of the doubt.

 

[Rockbadchild]

I completely agree with you.

I've tried my best to treat my boys the exact same way my parents treated me.

Both of my boys bought their own vehicles, both with their own money.

No different than the way my parents treated me

However, my parents saved to the point that they didn't want me paying interest if I had to do a auto loan when I was a young man looking for a vehicle. I'd doing to the same thing for my son.

Son made a mistake with the Mercedes he bought with his own hard earned money. He made a mistake IMO on the mustang, but he paid for it.

I'm just happy that he might have seen the errors he made and now wants a more practical car. I have NO doubt he would pay the loan back if I co signed, so if he wants a practical car, I will co sign if he asks, and if he doesn't want me to co sign, I won't.

He's doing better than me when I was at age 21, so I'll give him the benefit of the doubt.

I think everyone would agree that you’re doing a great job, at least from what I can tell. It’s obvious that you care and that you provide guidance without pushing too hard. I lift my hat to you, keep it up.

 

[etpm]

The year of the vehicle is way less important than the mileage. I just bought a 2020 Toyota Tacoma that looks great and has less than 40,000 on the odometer. Because of the quality of modern vehicles I expect to get at least 200,000 more before any significant costs. Tell your son to look at the mileage and the cosmetic appearance rather than the year. He may be able to save a considerable amount of money by not insisting on a newer car.
Eric

 

[Sigarms]

The year of the vehicle is way less important than the mileage. I just bought a 2020 Toyota Tacoma that looks great and has less than 40,000 on the odometer. Because of the quality of modern vehicles I expect to get at least 200,000 more before any significant costs. Tell your son to look at the mileage and the cosmetic appearance rather than the year. He may be able to save a considerable amount of money by not insisting on a newer car.
Eric

Good point, and it's something I look for as well when buying a used car.

For my wife and myself, we generally push up to 75K on the odometer when looking, depending on where we can get the price point at.

At this point I'm just glad our son has seen the issues with buying a "sporty car" with higher mileage for the 10-12k price point and is looking at a more "practical" car at a substantially higher price point for lower mileage. He just wasn't certain if he could get the loan himself with a better interest rate.

I've already told him I was lucky because when I was his age, I wasn't into cars and I was just fine with my "hand me down" 72 olds with 8 track tape player . That said, in the grand scheme of things in life, there are worse things to be addicted to as a young man in todays world.

 

[paulsharvey]

Milage vs year; in this day, I think its not unreasonable to get to get something below 120k. Id rather a 3 year old vehicle with 120k, than a 15 year old vehicle with 60k. Of coarse there is a lot of room between those two extremes. I worry when I see something with less than 6k/year, meaning it just sat.