Is the interest rate worth the credit history?

   / Is the interest rate worth the credit history? #131  
I feel like we're cruel parents...

Boy is moving along with wanting to trade in his Mercedes as a potential ball joint along with issues on his sound system not working now seems to have broke the camels back on keeping the Mercedes.

5 of his good friends in the local area around us ALL have had their parents outright buy their cars (most brand new) and we're forcing our boy to buy his LMAO (although we will help him on our end interest free depending on route we take).

Don't get me wrong, he didn't ask for us to buy him anything, but I was asking how all his friends could afford new cars under 20 years in age as I saw one of his friends in another different car.

As a father I really wish I would have put my foot down on him buying that Mercedes a couple of years ago, but I told him it was his money and he's worked hard, been good as a son, and he could do what he wanted to with his own money, even though I thought it was a mistake. This is one case where I was hoping I could have been wrong. Hopefully he'll learn his lesson, but I'm not certain. Had to put my foot down on saying no help on a Mazda Miata convertible LOL (but dad, I can get my duffle bag in the trunk was his reasoning).

Told him he's an adult now and he can buy anything he wants on his own if it's a convertible he wants.
You can't protect them forever and making mistakes (and learning from them) early in life is better than later since they still have time to correct it.

In my case, my son received an offer of a $25k loan at a low interest rate (with conditions) when he graduated from college. I counselled against the loan, but he took it anyway and bought a bunch of top of the line stuff. It took awhile to pay it off and in the process, he learned about depreciation and interest and loan financing in general.
 
   / Is the interest rate worth the credit history? #132  
Glad it worked out. Interest rates on used are almost always higher than new. We got 0% on our '18 Outback, a barely used '17 was like 4% and despite a lower price, would have cost more.

The only drawback to you carrying his note is that it doesn't help him build credit. Make sure he has a low credit limit card and pays it off in full monthly. Cheap, easy way to build credit.
 
   / Is the interest rate worth the credit history? #133  
Ended up buying a car yesterday.

When I found out what the interest rate would be on a used car loan for a 19 year old (even with a solid one or two year credit history AND being in the Air Force), I just paid for it outright, and he can make interest free payments.

To me the interest rates they offered was raping him.

Amazingly, everything worked out with his Mercedes. Didn't work in the trade in value on selling price, but afterwards the guy selling the car offered to buy it for his own kid after he test drove it with my boy, and the cash offer wasn't bad considering the I found out yesterday driving 2 hours to the dealership that the Mercedes AC wasn't working because that's the car we were driving LOL (wasn't planning on a trade in).


Hearing he is usaf means the interest goes up 5 points. Guaranteed easy money

Lightstream is a good source of used car loan if your credit can get you in. They don't take the title. Low fee. Low interest.
 
   / Is the interest rate worth the credit history?
  • Thread Starter
#134  
He has a credit card for the last 2 years. Not a high limit, but it's always paid in full.

What I was told is because of his young age and limited credit history, a car loan could help his credit, but the interest rate was way too high IMO just to build up his credit line.

The interest saved for 3 years is basically paying for his car insurance.

Already worked up a spreadsheet with his payments, next up before he leaves back for the base today is hitting is going over his budget numbers. You can lead a horse to water, and I'm hoping this horse will drink on his own...
 
   / Is the interest rate worth the credit history?
  • Thread Starter
#135  
Kid is happy with his buy. Better gas mileage and inevitably lower maintenance costs, and he can do a lot more work himself on the car himself.

Texted me this pic Early Sunday morning as he and a buddy were going hiking...

MUSTANG.png
 
   / Is the interest rate worth the credit history? #136  
In High School my nephew really wanted my long bed 96 F150 4wd extended cab...

We made the deal and he took good care of it but no longer has it.

It was taking all his money to keep the 2 gas tanks full plus the minor mods he wanted to do.

Sold it for a good price and learned a lot... even surprised his folks with the skills he picked up...
 
   / Is the interest rate worth the credit history? #137  
I bought my son and his wife their first car. They hadn't had it a month and an accident totaled it. Nobody was hurt. That was the positive take on the accident. I gave them my lightly used Ford F-150. Fortunately - it's still in great shape. He is able to work from home and does not drive much. Lives in Spokane. I really HATE driving in Spokane. The Taco Wagon just doesn't mix well with all those city drivers.
 
   / Is the interest rate worth the credit history?
  • Thread Starter
#138  
I bought my son and his wife their first car. They hadn't had it a month and an accident totaled it. Nobody was hurt. That was the positive take on the accident. I gave them my lightly used Ford F-150. Fortunately - it's still in great shape. He is able to work from home and does not drive much. Lives in Spokane. I really HATE driving in Spokane. The Taco Wagon just doesn't mix well with all those city drivers.
I would have preferred he just buy it on his own, but being he is in another state, being 19, and living on a military base, I have no doubt his interest rate would have been even higher than the bend over price the dealer in NC told me he would pay.

For just a 36 month loan on his own, it would have cost over 1k a year in interest alone which I thought was beyond ridiculous for 3 years.

The issue with Kids today is they look at their monthly payment, figure "hey, I can afford that monthly payment", but don't look at the total amount paid back on the loan with interest.

Nice thing was the car was under 11K. With the guy on the lot wanting to buy his old car for his own son, his monthly payment came down due to the principal owed, and his 36 monthly payments are more than manageable on his end.

Once the car is paid back in full no later than 3 years, after that, title goes in his name everything will be on him including insurance under his own name.
 
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   / Is the interest rate worth the credit history?
  • Thread Starter
#140  
As long as you don't squish them or try to park it should mix well, like a big rock in a bowl of cake mix :)
The first time driving the beltway around DC when I worked there, I was scared shiteless as a youngster driving a rental car.

Then when I took my "beater" 72 cutlass and I figured out as long as I don't care if I hit anyone or anyone hits me, I don't have a worry in the world on that roadway :ROFLMAO:
 

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