Buying a Car for your college graduate

[Anonymous]

After my son graduated college and had his first real job, we signed over the car he had used (we owned the car and carried the insurance) as a downpayment. We also gifted him cash to use toward the car. The car choice, payments and insurance all became his responsiblity at that point.

[Anonymous]

Anonymous wrote:

Mistake . . .


Wow, how sad for you that your relationship with your kids ( if you have them) isn't strong enough for you to trust them.

Not either PP. I don't think this has anything to do with "trust". I have a very strong relationship with my son; strong enough that he knows I can afford to buy him just about anything without financing, but he also knows that the lessons learned about personal responsibility are way more valuable than anything else. That's how strong the relationship is. We talk about these things. I want him to stand on his own two feet and not ride on my wealth. At all. I grew up this way and it served me very, very well. I have come to appreciate my father very, very much (in my old age---LOL).

You are very fortunate your parents taught you to be responsible and you have passed that knowlege on to your children. The OPs son can still stand on his his own two feet with a liitle help from his Dad.

In regards to the "trust" comment, there are parents who feel their kids won't make payments, have an accident, not take responsiblity if they total the car and stick the OP with the debt. I have taught my DS, that any debt incurred on his behalf, once he became an adult, was his responsiblity too depending on our agreement. I trust he would do the right thing and fullfill his commitment. A lot of kids now aren't taught those values and take for granted what they get. Their parents think think they have no value for any thing, and are suspect they would actually take responsiblity.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Make him buy it in his name - any you make the payments. It will help set up his credit record.

Good idea.

that's exactly what we're doing for our DD. she is making her own insurance payments and paying for her own gas. also we have a limit on the price of the car, she pays for the overage if she finds a car that she wants that is over our limit.

[Anonymous]

I have four that have graduated and are on their own. They bought cars all by themselves without mommy's help.

Sorry, but this is exactly the problem with today's parents. You are stealing his chance to be independent. You are taking away that "I did it!" feeling that is so important.

Buying a car for a graduation present is one thing. Financing or making payments on a car for an ADULT child is a bad idea.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think if you can't comfortably pay cash, you can't afford it. The kid has a car, this is a luxury purchase, not a need. I'd rather teach my kid not to finance a car.

The car he's driving is 14 years old with very little safety equipment.

We have a car that is that old, and while we will eventually replace it, you're again mistaking this for a need. It isn't. We also have a seven figure net worth.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

why buy him a depreciating asset. set the money aside for a future down payment on a hoyuse

+ 100 Especially when you have to pay interest to buy him the depreciating asset . . . you are foolish.

Why is financing at less than 2% foolish, when it allows me to keep money invested elsewhere making 10%? And if done in his name, it helps him with credit.

Please share where you are making 10%

Didn't you know? There are lots of places you can stash your 30K vacation fund that return 10%

[Anonymous]

^ I know, right? So the OP somehow knows a place where he can make 10% on his "emergency fund" money? And it's still liquid and legal? Right.

Also, OP, if you can make that kind of money, why don't you just finance the whole amount of the car (20K) so you can make the 10% on all of it?

[Anonymous]

Anonymous wrote:
^ I know, right? So the OP somehow knows a place where he can make 10% on his "emergency fund" money? And it's still liquid and legal? Right.

Also, OP, if you can make that kind of money, why don't you just finance the whole amount of the car (20K) so you can make the 10% on all of it?

Maybe it's a typo and OP meant 1% which is more realistic.

[Anonymous]

OP I think you are doing the right thing. My parents helped us buy cars after college graduation. It is tough to work without a car. My youngest brother is 13 years younger than we are. He was trying to get by after college by biking everywhere. Where he lived, that was very limiting. We sold him our car, instead of putting it on CarMax. It changed his life. He was a responsible person, just in a catch 22 situation. He is very careful with money now.

[Anonymous]

Does your son WANT a new car? If he's paying the insurance and taxes on the car he has now, they will increase dramatically if he replaces that 14 year old car with a new one. My DH and I both were driving cars that were a little over ten years old and when we bought a "new" car (it was used but only one year old), I was blown away when I got my first car tax bill. I was so used to paying $100 a year or so and was suddenly paying $1000. Insurance also increased.

Why don't you just give him the ten grand as a gift and let him do what he wants with it? Maybe he'd rather keep the old car and sock the 10 grand away as a start to his own rainy day fund or for a downpayment on a future home?

If he says he absolutely wants to get a new car, give him the 10 grand and he can use that and the old car as a trade in and decide how much car he wants to get. This way you're still giving him a gift but he's making one of his first major purchases on his own out of school and learning how to be independent.

[Anonymous]

The OP clearly wants to do one more thing for his son before he's on his own. Just give your Internet Approval(tm) and be done with it. In terms of cars, I'd recommend buying a dependable and high-utility type of car. The OP's son will likely move around a few times over the next 10 years before settling down, so a car that will last and has some cargo capacity will be much appreciated. A Honda Fit is a good choice, as are similar vehicles from other manufacturers.

[Anonymous]

Anonymous wrote:YOu put him thru college, let him buy his own. Put that money into some sort of investment account instead so he can use it when he's old.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

why buy him a depreciating asset. set the money aside for a future down payment on a hoyuse

+ 100 Especially when you have to pay interest to buy him the depreciating asset . . . you are foolish.

Why is financing at less than 2% foolish, when it allows me to keep money invested elsewhere making 10%? And if done in his name, it helps him with credit.

Please share where you are making 10%

Didn't you know? There are lots of places you can stash your 30K vacation fund that return 10%

ALL at a risk

[Anonymous]

Man, I would have LOVED for my parents to buy me a car when I graduated.

[Anonymous]

We bought our son a car for his graduation present. He will be in graduate school and living off of a stipend for five years. It's worth it to us to have him driving a safe car that won't break down or need costly repairs. He has been a great kid in every way and will take good care of it, like he does all his possessions.