Is the interest rate worth the credit history?

[MossRoad]

I'm pushing 60. NEVER bought a new car in my life, always used. Wife the same way, one reason why we think a lot alike even though we met in our mid 30's.

My father didn't buy his first new car ever until age 73

I don't want to dwell on the past for my son, but he realized in the grand scheme of things he most likely made a mistake buying a used Mercedes. That hopefully is a good thing

We bought one new car... in 1989.

 

[FPGT72]

Little confused by your post.

He could pay us as we'd just pay for it with cash, no interest charged on his end.

I agree with your comment about having a "record" of payments which is why I started with g thread.

Paying off a loan early with no fee is a no brainer IMO. My line of thinking is take out a 5 year loan, and pay it off early, have that payment history for credit on his that looks good, and he may be better off going that route.

That is what I am trying to say. Have him take out the loan, let it run for a month then pay it all off. He gets "credit" for having the loan and paying it off, and then there is no more interest. Win Win.

 

[scootr]

Re-read the original post. The kid was 16ish when he bought a 12ish year old Mercedes. He wants to buy a newER USED car that's more dependable.

No new cars involved.

My bad, and I apologize, the numbers I read seemed to indicate a new car?
My younger brother bought my Dad's low mileage MB and the repair bills are astronomical and they are frequent.
So my advice is the same.

 

[LittleBill21]

That is what I am trying to say. Have him take out the loan, let it run for a month then pay it all off. He gets "credit" for having the loan and paying it off, and then there is no more interest. Win Win.

except he paid interest for no reason

you want jump his credit score put him as an authorized user. my 6 year old has my credit score

 

[Torvy]

Best options for building credit without paying interest.

1) no fee credit card. Pay in full monthly.
2) 90 days same as cash deals. If you already have the cash to buy a bed (or whatever) use their sac deal and pay it off before interest accrues.

My oldest son did this wrong the other way. He didn't use any credit and when he wanted to buy a house he didn't have credit established. He's using a card for work travel now (personal card, they reimburse). He's an engineer, plenty of money, but lack of credit stopped him from buying.

I agree with others above. He doesn't need you to cosign. If he insists on getting a different car before this one is paid off, he may have to pay interest (but not because he wants better credit).

 

[plowhog]

We can float him a "in house loan" and buy a car outright, but he would be responsible for the monthly payments directly to us.

Everyone needs to find their own "right way" when it comes to money.

My experience has been that loaning money to family often leads to trouble or hard feelings. Maybe this is peculiar in my family only, I don't know.

What I learned is: if a relative needs or seeks money, I give it to them. No loans. No expectation of repayment. They are much happier. I am much happier. And it has never been abused.

Good luck whichever path you decide is correct!

 

[Hay Dude]

In my opinion, there is learning process that happens when you go out and get a loan for a vehicle that builds every time you do it. I've met too many grown people that don't know how to do this, and are afraid to even try. It's the little things that add up to being able to buy a house, or land, and become independent.

My parents helped me buy my first vehicle in High School with a $500 loan because I only had a grand saved up at the time. I had an after school job, so it wasn't a huge effort for me to pay them back. After High School, I sold it and joined the Marines.

Once I got settled into life on base, I decided that I wanted to buy a car. It turned out that every dealership, new and used, was more then willing to loan me money to do this. I shopped around, looked at a variety of vehicles before buying, and then went through the process of applying for my very first loan.

Eddie,
Semper Fi and thanks.
I truly mean that.

 

[Hay Dude]

I kind of like to lay back and read these discussions knowing there’s the “Dave Ramsey” corps and there’s people who know that there’s few if any ways to build a decent sized business without borrowing money (paying interest) on equipment to make a lot more money.

 

[LittleBill21]

I kind of like to lay back and read these discussions knowing there’s the “Dave Ramsey” corps and there’s people who know that there’s few if any ways to build a decent sized business without borrowing money (paying interest) on equipment to make a lot more money.

Maybe for blue collar type work. The world has changed. I know people making mid 6 figures with less than 10k invested in the beginning business. Some people can do it with a camera, others can click a mouse. Money is money. my side hustle did over 140k last year, less than 3k in costs, and we are normal people nothing special, just good idea's

My wife does advertising, she had a guy who sub contracts roofing. he did 400k last year, and never lifted a hammer.. work smarter not harder.

 

[paulsharvey]

I only made it part way down; but have he considered declaring bankruptcy? That upside balance is huge and will remain even when the car gets taken. I would Not loan or gift him anything if that is a real option.

Edit: I 'Thought' you said he borrowed $94k and now owes $120+k; but on a 2nd read, I'm guessing you meant milage....

If we are talking about being upside down by $30k plus, bankruptcy might be a option.