Would you buy your nanny a car?

[Anonymous]

Our nanny has been with us for nine months, but before that she was our cleaning lady for two years. (Prior to cleaning she was a nanny for four years for my husband's co-worker, whose kids grew up and didn't need a nanny anymore). She is with us 30 hours a week, and takes care of our child, cooks, cleans, does laundry etc. In addition to being our nanny, she also cleans houses for other people in our town and neighboring towns.

Our nanny recently got into an accident and completely destroyed her car, which she was financing. It was her fault. Her insurance will pay off the car loan, but she now needs to buy a new car. My nanny is an honest, hardworking mother of 3, but she has bad credit. She is also an immigrant with so-so English skills and easily intimidated by people in positions of authority. The bank charged her 19% interest on the car that she wrecked. 19!! Because my nanny does not have money for a down payment, the bank was dragging its feet regarding the terms of a new loan, so I went to the car dealership with her to see if we could get more information. We were told that if she could put down $5,000, it would greatly reduce her interest rate. My husband and I are willing to put down the $5,000 for her, and pay her $80/week less until she works it off. With the deposit, The bank is offering 14.99% interest, which is still highway robbery.

My husband and I are debating whether to buy the car ourselves, give it to our nanny, and have her sign a contract saying that she will pay us X amount each week until the car is paid off. We don't want to own the car ourselves, since she drives it around for her cleaning jobs, and we are leery of taking on the liability. It is a big risk though, to buy a car for her. And it comes with the headache of what happens if the car breaks down? If she gets into an accident? If we want to part ways? On the other hand, it seems unconscionable that she pay 14.99% interest. Our nanny is a good person - she works very hard to support her children and her parents, and we hate to see her being taken advantage of. It just seems so unfair.

What would you do?

[Anonymous]

I think you know the answer to this question, but the decision is muddied by the fact that you know her, you know she's got three kids, she's not got good english, etc. You're using all these reasons to hesitate on saying no.

But the answer is no, I would never buy my nanny a car. Have your husband go with her (because car salespeople are sexist) and negotiate on her behalf for as good of an interest rate as she can get. But do NOT buy her a car.

[Anonymous]

A former employer did buy me a car. She needed me to drive her child. When I eventually moved, I paid off the balance and kept the car. Win-win.

[Anonymous]

We had pretty much the same situation 4 years ago. Our nanny got into an accident and the damage to her car was more than the value so it was totaled. She had poor credit from medical debt and wasn't going to be able to finance at an affordable rate (19% sounds about what she was being quoted). DH and I agreed that she needed a car, we weren't willing to co-sign and didn't really want to buy one for her since it would be for more than just work. We ended up financing the purchase and taking $60 out of each paycheck. DH and the nanny went to the dealership together and he helped her with the negotiation and purchase, the loan is recorded in loanback.com and when she finishes paying it off we'll transfer the title.

She stopped working for us after a couple of years to go back to school, but she pays each month (and uses it as an excuse to visit the kids). We get notification from her insurance company each renewal period, which confirms that the car is still insured. Honestly, I was a bit worried that we were nuts for doing this, but we were in a position to help her out and it's worked out well.

For those who say not to do this, we always figured that as the worst case scenario and she stopped paying that we'd end up having to take possession of the car. She was able to put a few thousand down, so even if we'd have to have gone that route we wouldn't have ended up way in the hole.

[Anonymous]

I think if you can afford to do this without causing yourselves financial hardship then you should do so, not should so much, but I think it would be the right thing to do.
Thanks for being a good person OP

[Anonymous]

I'd give her a few thousand bonus toward a new car.

[Anonymous]

I think it's a great idea. I myself borrowed money from a former nf to repair my first car. I would take $80/ each week's pay and $1000 after tax time (with all those kids and job she should b getting a good return) plus cut bonus in half ( if you use to give her 400 now give her $200). This way car will be paid for quickly. With all this added up its 5500/year. She could pay it off in about 3 years if she goes for an average car.

[Anonymous]

Only give , don't loan. Loaning can go south very quick.

[Anonymous]

NO!!!!!!!!!!!!!!!!!!!!!!. Buy your family a second used car and allow her to drive it during work hours only. I would have her sign a contract too. When I have other people's children in my car, I have them sign a contract too. IT works both ways. But I would not buy someone else a car.

[Anonymous]

Yes,I would. Do all the good you can when you can.

[Anonymous]

Anonymous wrote:NO!!!!!!!!!!!!!!!!!!!!!!. Buy your family a second used car and allow her to drive it during work hours only. I would have her sign a contract too. When I have other people's children in my car, I have them sign a contract too. IT works both ways. But I would not buy someone else a car.

What do those other parents sign?

[Anonymous]

I'd loan her the $5000 with little on no interest, screw the banks. All she needs is a $5000 car. I have one, will last me another 8 years.
She should not get a more expensive car than $5k and pay you back and the balance with 14.99% interest. all she should have to worry is the $5000k to you. She still has insurance and repairs to worry and tags and taxes.
I'd buy it and put it under her name so she can insure it and have her a sign a little paper stating that she will work it off.
I wouldn't bother with paperwork having the $5000 as a collateral and whatnot. I doubt she will disappear. she will still need a job and references.
Don't give her your car. It's your insurance on the line. might be more expensive than the $5000.
It's just a $5000 car she will work off. Time she saves by having a car is important. Not having a car must be hard on a person who has cleaning supplies and several jobs. Seems like the perfect person to help. With 80 a week, she'll work it off fast.
What about insurance on a new used car she needs now?
Will they even insure her with the crash on her record and bad credit? how much will that be? Is it another $50 a week?
How much time /money has she lost having no car? those are really the questions I would have. I'd skip the banks and car dealer who are out to get the most out of her bad situation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:NO!!!!!!!!!!!!!!!!!!!!!!. Buy your family a second used car and allow her to drive it during work hours only. I would have her sign a contract too. When I have other people's children in my car, I have them sign a contract too. IT works both ways. But I would not buy someone else a car.

What do those other parents sign?

Seriously, that is going overboard. Get ready for your child to be excluded from future outings after this gets around to other parents.

[Anonymous]

We bought our long-term nanny a new car. There's no way she could have bought one on her own. I don't know of any other parent who has done this so I'd say we were unique.

[Anonymous]

OP, it sounds like you have known your nanny for a while. My advice first and foremost is to advice her to repair her credit. She could start off by paying off any debts that she has and then getting a secured CC. After 6 months or so, she could consider applying for a CC with capital one.

My nanny has been almost in the same position like yours. She has 2 kids, bad credit, single mom etc. When she was expecting her second, I considered several options such as cosigning for her, loaning her $10K to buy a nice used car. I even took her to a dealership that I had a great relationship with. The dealership actually offered to give her a good interest rate.

However, all the cars that the nanny wanted were $18k before tax and tags and she only wanted an Acura. She would not consider another model. She was also dragging to pay off a $300 debt with a bank ( this is what was ruining her credit). At that point I gave up.

Looking back, I am glad I didn't loan her the $$ or co-sign for for her. It would have been one of the worst mistakes of my life. My relationship with her went south after she had her 2nd child. More than 3 times I have considered letting her go for cause. One time she didn't call or show for 4 days because of boyfriend drama...

As someone who has been there and almost done that, I would say give her tough love or at least give the situation another month or so. She needs to take responsibility for her actions- in this case she needs to repair her credit first. Let her pay that 14 % interest rate if she desperately needs a car.