Should we help our Granddaughter?

Toyman! said:

No. You should not go into debt to buy your grandaughter a car.

You should give her a cash budget you are willing to spend ($2k-$4k) and guide her in buying an inexpensive used car. 

This is what I did for my daughter. She ended up with a $4k Chevy Sonic that she still drives 5 years later. She takes very good care of the car because she knows the value of it and what it will take to replace it. 

 

This is the way.  The kid needs skin in the game. 

Kudos for you in trying to help.  Double kudos for thinking about maintenance and overhead for the future.  Triple kudos for thinking EV.

Only recommendation I would have is to consider a hybrid over an EV.  Not that EV's are bad, just that she's starting off in college with potential moves to new apartments/internships/medical school/etc in her future.  I agree that the EV infrastructure is improving and will continue to improve, but if she got a great internship opportunity out in the boonies where EV charging hasn't caught up, it could cause headaches. Doable?  Absolutely.  But I'm sure you want to reduce any stress that finding a charging place could, potentially, cause.

Just my opinion worth the electronic bits it's been typed on (i.e. pretty much zilch)

-Rob

Don't worry about "slow" charging, if she's only doing about 20 miles/day and she can plug it in every night then it should be fully charged in about 10 minutes.

In reply to Fueled by Caffeine :

X2

my 16 year old put in $1,000, grandpa added $1,000 and I put in the $2,000.  Skin in the game.  
 

nobody said miata yet? what have we become?!

AAA card  and  basic tools and belts etc for a quick fix .

Plus a full size spare tire ,

Plus for the winter , sleeping bag , extra clothes and some candles....

No idea on which car , I never lived in a place with snow.

bearmtnmartin (Forum Supporter) said:

Its all expensive for a student commuting a very short distance. Help her buy a scooter if she cannot bicycle 5 miles each way. They do 35 mph so that is a 7 minute commute. 

Snow, Ice, and 40 below wind chill for most of the school year  is why that won't work.  

californiamilleghia said:

AAA card  and  basic tools and belts etc for a quick fix .

Plus a full size spare tire ,

Plus for the winter , sleeping bag , extra clothes and some candles....

No idea on which car , I never lived in a place with snow.

California has snow.   Just look at the mountains.   I could see it from San Diego.   ( even drive in it if you're willing to). 

rob_lewis said:

Kudos for you in trying to help.  Double kudos for thinking about maintenance and overhead for the future.  Triple kudos for thinking EV.

Only recommendation I would have is to consider a hybrid over an EV.  Not that EV's are bad, just that she's starting off in college with potential moves to new apartments/internships/medical school/etc in her future.  I agree that the EV infrastructure is improving and will continue to improve, but if she got a great internship opportunity out in the boonies where EV charging hasn't caught up, it could cause headaches. Doable?  Absolutely.  But I'm sure you want to reduce any stress that finding a charging place could, potentially, cause.

Just my opinion worth the electronic bits it's been typed on (i.e. pretty much zilch)

-Rob

Thinking like a father.  College kids like the dorm/ room near campus.   Having to go home to charge the car  is a lot cheaper than dorm or room rent. 
  Plus Grandma and Grandpa live on a lake 23 minutes away.   

Fueled by Caffeine said:

Toyman! said:

No. You should not go into debt to buy your grandaughter a car.

You should give her a cash budget you are willing to spend ($2k-$4k) and guide her in buying an inexpensive used car. 

This is what I did for my daughter. She ended up with a $4k Chevy Sonic that she still drives 5 years later. She takes very good care of the car because she knows the value of it and what it will take to replace it. 

 

This is the way.  The kid needs skin in the game. 

It's not our debt.  We'd co-sign the loan or something.  She would  owe the money.  
    

I was viewing 60,000 mile NC miatas in Tampa Bay area for ~$10,000.  What could be cooler than that?

And, just saying, your view of the coolest place to live while going to school may not match that of an 18 year old.      LOL

Datsun310Guy said:

In reply to Fueled by Caffeine :

X2

my 16 year old put in $1,000, grandpa added $1,000 and I put in the $2,000.  Skin in the game.  
 

 

 It's different if your 16  Year Old  granddaughter has 9 college credits already and is already going to college to become a doctor.  
  That plus she's captain of the Girls Hockey team and has gone to state 2 times already.   Currently being watched by the Olympic team.  ( finished 2&3). Plus Soccer with a winning record.  

Purple Frog (Forum Supporter) said:

I was viewing 60,000 mile NC miatas in Tampa Bay area for ~$10,000.  What could be cooler than that?

And, just saying, your view of the coolest place to live while going to school may not match that of an 18 year old.      LOL

 

 

 

 

Yes I know that!   I built this place thinking one daughter would want to live on the lake.  
  Sigh!   How wrong a guy can be.   

frenchyd said:

Datsun310Guy said:

In reply to Fueled by Caffeine :

X2

my 16 year old put in $1,000, grandpa added $1,000 and I put in the $2,000.  Skin in the game.  
 

 

 It's different if your 16  Year Old  granddaughter has 9 college credits already and is already going to college to become a doctor.  
  That plus she's captain of the Girls Hockey team and has gone to state 2 times already.   Currently being watched by the Olympic team.  ( finished 2&3). Plus Soccer with a winning record.  

    

No, it's no different. It's about the lesson, not the car. 

A co-sign may be a worse decision than going into debt. Does she have any income while in school and hockey and soccer? Do you want her to concentrate on paying for a car or going to school and practice? If she defaults, the ding goes on her credit and you still get stuck with the loan. 

You can get a very good commuter for under $5k. Beyond that, the only thing $25k gets you is a bank loan. 

Your description of her accomplishments at school leads me to think she's pretty bright.  Has she stated a preference on what vehicle she drives?

frenchyd said:

Fueled by Caffeine said:

Toyman! said:

No. You should not go into debt to buy your grandaughter a car.

You should give her a cash budget you are willing to spend ($2k-$4k) and guide her in buying an inexpensive used car. 

This is what I did for my daughter. She ended up with a $4k Chevy Sonic that she still drives 5 years later. She takes very good care of the car because she knows the value of it and what it will take to replace it. 

 

This is the way.  The kid needs skin in the game. 

It's not our debt.  We'd co-sign the loan or something.  She would  owe the money.  
    

She sounds like a super impressive young lady, and you're rightfully proud. I completely understand wanting to help out. But why would you want a 16 year old (whom you obviously love and care about a great deal) to have debt of any kind? Why add any financial stress to a kid that already has so much on her plate? In between her academics and athletics, she now gets to feel pressure to work enough to afford a car payment?

I'm not saying that you should outright buy her a new vehicle either. I'm just saying that I don't think any 16 year old needs debt as a favor from her family. If you were going to float her the down payment or something, just give her the cash and help her find a cheap used car. It's probably going to get beat up anyway so planning her transportation for the next 15 years seems a bit optimistic to me. $5k-7k beater with a heater that's fully paid for seems like an ok starter vehicle while she gets used to driving. And she can just focus on her studies and athletics which has obviously worked out very well thus far in her life.

If you can keep it plugged in enough for slow charge my vote is the Bolt. I lust after one in a very strange way. 

I do agree that some sort of re-payment system be worked out ahead to keep her head on straight (not that she sounds like she needs it)

Just went through this with our youngest (19 y.o.).. We started looking at used, and as has been stated, that market segment is a mess right now.. We quickly learned that 'gently used' is usually priced higher than new?!  I didn't believe it at first, but it is apparently where we are.

I pushed for an EV/ Hybrid with the family, but we found they're still just a bit out of reach for us, and I really didn't want to strap my kid to a big, long-lasting car loan.  For us, we found the solution in a new Chevy Spark (ok, go ahead and laugh ), but it fit the bill, we put a big chunk into it, and she's cosigned/ paying it off.. She loves it, I've gotten over myself thinking that my first car cost me 2K, and why isn't that still the case?!? (OK Boomer ), and silver lining; she's building credit.. 

Postcript: I'm so glad we found something, anything, and that the ordeal is over.. I forgot how much I don't like buying daily-driver cars for which I have no passion or emotion-..

--ccrunner

I live in a community that is heavy Eastern European families and some are first generation.  These families work hard and most all have a high paying side job.  Don't get me wrong - they work hard, earn hard and play hard.   Some of my neighbors buy their 16 year olds new cars in high school. 

My 16 year old asked - why don't I get a new car?  Because you'll probably back over a garbage can, off road the left side in error, break off 2 plastic hub caps, put 7 girls inside and forget to mention a dash light.  

And she did.  

Also I agree with the guy above on debt - she will run up $250,000+ so start paying that down.

frenchyd said:

It's not our debt.  We'd co-sign the loan or something.  She would  owe the money.  
    

And that's another reason I recommend a used car - don't saddle your granddaughter with a new car's worth of debt (eventually paying for new-car depreciation) while she's working an entry-level job. Spending on used cars is much more flexible - they're cheaper up front and if something goes wrong, worst case, if you have access to any backup transportation you can park the car on blocks until you can afford to fix it if money is tight. Miss a payment on a new car and the dealership will eat all the payments made so far, repo it and sell it to the next sucker.

I like to say that buying a new car is either a luxury for the rich or a deal with the devil for the desperate, this situation doesn't match either of those, so even with pandemic-boosted used car prices, you should be looking at used.

Forget depreciation.   That only counts if you don't keep the vehicle.   
     I practice run 'em 'til they're done.  Typically 20+ years.   My Truck cost me $100 a month to own.  The Accord was $ 117  and the Saturn was $35.  Nothing ever broke down and left us stranded. 
It's wonderfully liberating.  And produces the lowest cost of ownership. Finance things for 6+ years. And you have 14 years of no payment.  Once the payments are over you put away a little slush fund  for the unexpected.  ( it's also handy if the water heater quits or  you want a new coach).  
   People will always need transportation.  So plan on it.  Don't buy what's cheapest, plan for what you really need and spend the money. It's cheaper in the long run.  

frenchyd said:

Fueled by Caffeine said:

Toyman! said:

No. You should not go into debt to buy your grandaughter a car.

You should give her a cash budget you are willing to spend ($2k-$4k) and guide her in buying an inexpensive used car. 

This is what I did for my daughter. She ended up with a $4k Chevy Sonic that she still drives 5 years later. She takes very good care of the car because she knows the value of it and what it will take to replace it. 

 

This is the way.  The kid needs skin in the game. 

It's not our debt.  We'd co-sign the loan or something.  She would  owe the money.  
    

That is absolutely incorrect.  If you co-sign the loan, it is YOUR debt.  You would owe the money just as much as she would.  If, for whatever reason, she doesn't hold up her end of whatever deal you make with her, it's coming out of your pocket.

Actually, thinking about it more, I don't think that you CAN co-sign a loan with/for her as she is only 16 and cannot legally enter into a contract until she is 18.  So I doubt that you will even find a lender that would make such a loan agreement.  So if you take out a loan, it is your loan.  You could loan her the money yourself, but it's still your loss if the contract isn't fulfilled.  This is not a good idea.   If your really want to help then just buy her whatever car you think is best and let it go.

STM317 said:

frenchyd said:

Fueled by Caffeine said:

Toyman! said:

No. You should not go into debt to buy your grandaughter a car.

You should give her a cash budget you are willing to spend ($2k-$4k) and guide her in buying an inexpensive used car. 

This is what I did for my daughter. She ended up with a $4k Chevy Sonic that she still drives 5 years later. She takes very good care of the car because she knows the value of it and what it will take to replace it. 

 

This is the way.  The kid needs skin in the game. 

It's not our debt.  We'd co-sign the loan or something.  She would  owe the money.  
    

She sounds like a super impressive young lady, and you're rightfully proud. I completely understand wanting to help out. But why would you want a 16 year old (whom you obviously love and care about a great deal) to have debt of any kind? Why add any financial stress to a kid that already has so much on her plate? In between her academics and athletics, she now gets to feel pressure to work enough to afford a car payment?

I'm not saying that you should outright buy her a new vehicle either. I'm just saying that I don't think any 16 year old needs debt as a favor from her family. If you were going to float her the down payment or something, just give her the cash and help her find a cheap used car. It's probably going to get beat up anyway so planning her transportation for the next 15 years seems a bit optimistic to me. $5k-7k beater with a heater that's fully paid for seems like an ok starter vehicle while she gets used to driving. And she can just focus on her studies and athletics which has obviously worked out very well thus far in her life.

Debt is part of life unless you are a member of the 1%.   Many of them got where they are by using other peoples money ( wisely ). 
  Unless you want to pay more and more and more for shelter, ( in the form of rent)   You're going to join most adults and assume 30+ years of mortgage debt.  
    Her family qualifies for food stamps.  So she's going to have that $250,000 student loan debt upon graduation. 
   She knows that going in.  
       
  New cars usually get at least 4-5 years  of expense free ownership.  Tires and brakes typically last 65-85,000 miles  so other than payments are relatively cheap to own.   
   Then from 5 to 10-12 years it seems there is an annual expense. Battery, starter etc. nothing horribly expensive. Typically under $500 

  Following that comes the bigger stuff. Transmissions valve jobs, etc. 

   All of that assumes several owners some of who neglect normal maintenance things hoping  to sell it off before they hit their pocketbook. 
        That's why I buy new, maintain it well,  and keep it until the dreaded tin worms make it unsafe. 
    Since I started doing that my car budget ( except for toys) is actually trivial.  I seldom do much work anymore.  Typically a good cleaning. And a crawl underneath on the creeper to check things out.  About every 20,000 miles or so I change my own oil (instead of having it done). 
   There is no free lunch. You can fix your own cars?   At what cost?   Time away from the family?  Going to work with grease under your fingernails?  Calling in sick because the car isn't done? 
 Yeh,  I've done all those and more.  
  

In reply to frenchyd :

Yeah, I've done that math on every company vehicle I've purchased. It doesn't add up even when paying shop rates for repairs. 

Used with 125k to 150k is the sweet spot. Then run them until 350k to 400k. My total repairs for this year on 3 trucks with over 200k on each of them is under $200 not including regular maintenance. I put a battery in one a couple of weeks ago. My total truck payments on those 3 trucks is also $0.00 for the year.