Should we help our Granddaughter?

My daughter is 19 and a senior in college. She scored extremely strong on the MCAT and is headed to med school next year. There are obviously several things in common with your grandaughter.

I bought mine a well used Honda CRV. I'd do it again too. No payment and it's enough of a beater that the college wear and tear and even having the cat  converter stolen out from under it in the dorm parking lot has been okay. I've fixed a few things here and there on weekends. It's been Honda quality and a bargain in my eyes. 

Depending on how far she has to go to medical school and where it's located at I will buy her a new, or nearly new, Corolla or Civic. I can't have my little girl halfway across the country in a 17 year old CRV.

Cliff notes....Honda. Every time...

In reply to Toyman! :

You are different from most business that I've worked for.  I wonder why if you're right, why other very successful business fail to adopt your  method? 

If sold on a new EV, go Bolt over the Leaf for a few reasons. First, the Leaf battery pack is not liquid cooled, which all else being equal, will result in it degrading more quickly (and hurting resale value). Second, the Leaf uses an older charger type (CHAdeMO), which is being deprecated as CCS is the new standard. This means that aside from your home, it's going to be tougher to charge a Leaf. And the Leaf will also charge slower than the Bolt. I've driven the Leaf and loved it (it was the lower range base model), but it does have some significant drawbacks.

I'm prepping our '06 Rav4 to be used by our kids as they start driving. Ours is the V6, the 4cyl had oil consumption issues for the first few years, then they switched motors and the newer 4cyls are much better. AWD, all the airbags, and it has the ability to be shifted manually into a lower gear, which is helpful in the snow. I think a CR-V would be another good option for a young driver.

The Toyotas and Hondas are not perfect, but I think they're good options given your granddaughter's situation. Pick something up with 100-150k on it that's been maintained well, and it'll hold its value and will hopefully give you years of good service.

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.  
    

1. Only fools cosign loans. 
2. The borrower is slave to the lender. 
 

Those are ancient truths. I suggest that you rethink your plans. 

stukndapast said:

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.

I sure did.  When I was 15.  My dad cosigned.  And I never missed a payment of $22/mo.  I was making $1.00/hr.  

I just came back to say a 16YO driver needs a beater for a year or two unitl they get that frst wreck out of their syste.  I used to recommend a late 90s Maxima, but they are getting long in the tooth now.   A CRV or Rav4 may be a better choice now.    

frenchyd said:

STM317 said:

frenchyd said:

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. 
 

Are you hearing yourself? This 16 year old child comes from a low income household, is about to take on $250k of debt, and you want to add to that? She's a student athlete that wants to go to med school, and you want her to worry about making a car payment through all of that too?

It doesn't matter what you do as an old man. A 16 year old is going to use and abuse their vehicle. Even if they're incredibly careful and lucky with the vehicle, and it survives the next 5 years intact what are the chances that it still fits her life 1 or 2 decades from now? What fits her life at 16 isn't likely to fit her life 20 years later at age 36 so I'm not sure why you're planning for her to own this vehicle for decades to come the same way that you might as an adult.

Buy her a decent, reliable vehicle for as little as possible. If you want an EV, you can get used ones that would meet her needs in the low teens. Personally, for the same money I'd go the PHEV route to give her flexibility. But none of these things requires $20k+ of debt for a child with very little income, very little financial security backing her, and a ton of stuff on her plate already.

As with most things online:

Did you want actual advice, that many smart folks here have given?

Or did you just want people to confirm the decision you seem to already have made?

frenchyd said:

In reply to Toyman! :

You are different from most business that I've worked for.  I wonder why if you're right, why other very successful business fail to adopt your  method? 

Probably absentee owners that don't want to actually pay attention to their business, know anything about vehicles and what it costs to keep them running. 

Or, owners who think as you do. This is not the 1970s where ring jobs and valve jobs were common and 100k was all you expected to get out of a vehicle. This is the 2020s where vehicles will frequently run 300k-400k with few problems. It's cheaper to use the last 200k with no payments. 

The last two company trucks I replaced were over 300k by the time I sold them. Both of them are still on the road. One, an employee drives 40 miles to work daily, the other my son drives to school. Both are $2500 vehicles with plenty of life left in them. A little maintenance and a few repairs and they should last well into the 400k range. 

My wife's daily has 340k on it. My Daughter's daily has 190k on it. My eldest now drives my old Ridgeline with 260k on it. My middle son's Cherokee has 240k on it. The youngest drives the Colorado with over 300k. 

Kids don't need new vehicles. 

I will grant you that I don't live in the rust belt. Down here with a little care, a vehicle will stay good-looking for as long as a person is willing to take care of it. A 10-year-old vehicle up there might be a rusted heap in which case, a fly and drive or a new vehicle may be the best choice. 

STM317 said:

frenchyd said:

STM317 said:

frenchyd said:

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. 
 

Are you hearing yourself? This 16 year old child comes from a low income household, is about to take on $250k of debt, and you want to add to that? She's a student athlete that wants to go to med school, and you want her to worry about making a car payment through all of that too?

It doesn't matter what you do as an old man. A 16 year old is going to use and abuse their vehicle. Even if they're incredibly careful and lucky with the vehicle, and it survives the next 5 years intact what are the chances that it still fits her life 1 or 2 decades from now? What fits her life at 16 isn't likely to fit her life 20 years later at age 36 so I'm not sure why you're planning for her to own this vehicle for decades to come the same way that you might as an adult.

Buy her a decent, reliable vehicle for as little as possible. If you want an EV, you can get used ones that would meet her needs in the low teens. Personally, for the same money I'd go the PHEV route to give her flexibility. But none of these things requires $20k+ of debt for a child with very little income, very little financial security backing her, and a ton of stuff on her plate already.

I was successful with my daughter at 16.  I bought it, she made payments, when not able we would help her out but she paid most of  them.   
        She kept that car through high school, college, her first jobs, marriage,  the birth of her children, her first and second house,  and well into her career. All on the original clutch she first learned to drive on.  It wound up being the down payment on her new Honda Civic. 
 No good used car would ever do that.    
    Teaching children to be responsible and use credit wisely is what modern parents should be doing. 
     One point.   Kids don't need new cars, they need reliable transportation. 
      New is reliable. Problems can be taken to the dealer and fixed.   ( Although, remarkably I'd have to go back to the 70's when I had any trouble with a new car). 
    I was typically out of the door as early as 4:00 am and home typically at 10-11:00 pm   So when would daddy have time to fix a used car?  To dad's who don't know how?  It's off to a mechanic.  
        Second.  A Saturn Ion, a Toyota Yaris, and my newest suggestion?  Nissan Leaf or Chevy Volt?  Aren't status symbols. Just cheap basic transportation. 
    If buying used is somehow better, you simply aren't looking at the big picture. 
  Interest rate on used cars is higher for shorter term than new cars. 
  Repairs  on a used car is going to cost more than you'll spend on a used car  over the same period. 
    I've never seen a trade in on a lot with fresh oil change,  new brakes, etc.  they only do the absolute minimum other than cleaning them.  

Toyman! said:

frenchyd said:

In reply to Toyman! :

You are different from most business that I've worked for.  I wonder why if you're right, why other very successful business fail to adopt your  method? 

Probably absentee owners that don't want to actually pay attention to their business, know anything about vehicles and what it costs to keep them running. 

Or, owners who think as you do. This is not the 1970s where ring jobs and valve jobs were common and 100k was all you expected to get out of a vehicle. This is the 2020s where vehicles will frequently run 300k-400k with few problems. 

The last two trucks I replaced were over 300k. Both of them are still on the road. One, an employee drives 40 miles to work daily, the other my son drives to school. Both are $2500 vehicles with plenty of life left in them. A little maintenance and a few repairs and they should last well into the 400k range. 

 

 

 

I happen to agree with most of that.   Maybe I would agree with all of that except for most of my working life  my vehicles were paid for.  In fact I made a profit off of everything I owned from  the 1980's on.  
   I either got a monthly allowance or was paid per mile.  ( IRS rules changed at some point).  In fact my last truck was paid for at least three times over. ( one of the advantages of covering  a lot of territory with a reliable truck). 

frenchyd said:

Forget depreciation.   That only counts if you don't keep the vehicle.   
     I practice run 'em 'til they're done.  Typically 20+ years. 

While I agree with this (and commend you for wanting to help your granddaughter), that is how you and I feel about car ownership, not necessarily how your granddaughter feels about it. As a 16 year going to college, possibly going to med school, possibly playing in the Olympics, possibly doing something completely different once she gets more life experience, her life is going to change dramatically in the next four years, not to mention eight or ten years down the road. The car she gets now might be completely unsuitable for her life soon and residual value could be a real concern. Depending on where she goes to med school, a car actually might be a huge burden and she might be better off with no car. So consider that when debating the new vs used car options too.

Regardless of what you and her  decide, one practical tip: make sure her hockey equipment fits easily in the car, preferably it would have enough space to fit a friend's equipment too. A Bolt or a Leaf is probably fine for fitting one set of gear, getting two sets might be tough.

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 can not get a loan at 16. There would be no co-sign, it would be in your name. I would not burden a 16 year old with a car payment, and insurance on a new car. A buddy just bought his 16 year olds a Sonic with 85k miles for $5500 and his 17 year old a Buick Verano with 90k miles for $6500. That's the way to go. She needs reliable wheels, not stress of debt. 

This is a terrible idea. 
 

Turn to the cars for sale section of this forum, and buy a beater. Outright. NO LOAN. 
 

I just sold a Mercury Marquis here for $1400 that would be perfectly suitable as a short distance commuter. It had less than 60,000 miles on it and needed NOTHING to drive reliably. 
 

My daughter was driving the Marquis before I sold it. She could have taken it to school.  She made the very adult decision that she did not need a car at school (in Colorado). We sold it and put the money in her college account. 
 

I have 5 kids, and every single one of them has started with a sub $2000 beater with a manual transmission that was a "gift" from me. Crappy cars. They hated them. But they learned how to fix stuff, and how to save money so they could get their own cars to replace those beaters. 
 

You are not helping her by making this decision for her, and committing her to any kind of loan. 
 

Don't do this. 

 2005 Malibu with 107k. for $5k at a dealer near you. These are solid, reliable cars. That's what she needs. That's helping her. Your magic scenario is not. 
 

In reply to frenchyd :

One more thing...

You recently jumped on me for considering putting an $8000 crate motor in a car, because it was "not grassroots enough". 
 

If you value the things that can be learned on this site and with grassroots vehicles, why would you deny your granddaughter those opportunities?

The truth is that if you do absolutely nothing this problem will solve itself, and your granddaughter will grow through it, regardless of what decision she makes. 
 

For all we know she could go to college and decide not to pursue med-school, hell she could decide not to finish college. And never ever plan on a teenager making a series of logical decisions for the next 10 years just because you did back when gas was $.47 and cellphones and internet didn't exist. She isn't you and she is growing up in a different era. Several generations after yours an entirely different world and set of economic issues. And certainly do not bet on her wanting to stay in that scary looking room you posted that will be 23 miles away from everything that will matter to her at the time. The lighting doesn't even look good enough to take a selfie in. Did you consider that?

I think his threads are more about him bragging about his last 70 years of accomplishments and his life. Even if the this concerns another person who isn't Mr Frenchy D. Ask for advice then argues against provided advice by bringing up how he did this and that over 40 years ago that isn't at all relevant to the topic. Y'all keep falling for it lol

frenchyd said:  

    Teaching children to be responsible and use credit wisely is what modern parents should be doing. 
   

I agree. But a 16 year old taking on car payments isn't safely and responsibly using debt. It's adding a completely unnecessary burden. There are perfectly legitimate reasons why a 16 year old can't get a credit card or take out a loan.

If you want to teach her about responsible credit use, make her an authorized user on one of your credit cards, and have her use it just for gas for her car, paying it off every month. It gets the same point across and builds proper habits with much lower burden.

Also, multiple times now you've mentioned Volts in unusual context so I want to clarify to avoid confusion. The Chevy Volt that I'm suggesting was a Plug-In Hybrid (like the Prius Prime you're considering and others) with an all-electric range and supplemental gasoline engine. They're super reliable, efficient, and cheap/easy to operate. The second generation (2016-2019 model years) has over 50 miles of electric range. They haven't been made since 2019 so buying used is the only option.

Chevy also makes the Bolt, which is a fully electric hatchback. That's comparable to a Leaf, and can be bought new or used.

In reply to Steve_Jones :

So when the 85,000 mile car breaks down is she going to fix it?  Or stress out who will?  How much stress is she going to have worrying about that sound or squeak?Is that normal?  Who should I take it to that will know?     Is she supposed to know when new tires are needed?   Or how often to change oil?   
    If she has a cell phone is she stressed about making payments on that?  
    Let's not kid ourselves, young people stress about so many things ( popularity,  dates, clothing, etc.) that they actually welcome routine.  1st of the month send off the $300 payment.   She earns $150  for cleaning our house.  Every other week.  That's a new car payment.    Problem solved. 
         Plus it's problem solved for the next 20 years or so. Time to complete college, medical school, internship,  her first job, maybe marriage and family if she's like my daughter.  

In reply to frenchyd :

That's really paternalistic.  Or maybe misogynistic.  It sounds like you don't trust her to make the most basic adult decisions. 
 

I'm pretty sure you are wrong. 

STM317 said:

frenchyd said:  

    Teaching children to be responsible and use credit wisely is what modern parents should be doing. 
   

I agree. But a 16 year old taking on car payments isn't safely and responsibly using debt. It's adding a completely unnecessary burden. There are perfectly legitimate reasons why a 16 year old can't get a credit card or take out a loan.

If you want to teach her about responsible credit use, make her an authorized user on one of your credit cards, and have her use it just for gas for her car, paying it off every month. It gets the same point across and builds proper habits with much lower burden.

Also, multiple times now you've mentioned Volts in unusual context so I want to clarify to avoid confusion. The Chevy Volt that I'm suggesting was a Plug-In Hybrid (like the Prius Prime you're considering and others) with an all-electric range and supplemental gasoline engine. They're super reliable, efficient, and cheap/easy to operate. The second generation (2016-2019 model years) has over 50 miles of electric range. They haven't been made since 2019 so buying used is the only option.

Chevy also makes the Bolt, which is a fully electric hatchback. That's comparable to a Leaf, and can be bought new or used.

 Yes I often do misuse Bolt and Volt.   I  do agree it's a viable choice.  Last I looked ( admittedly briefly) they were actually selling used for the same price as new.  
    The hybrid  offers flexibility. But at a cost.  (Gas is a lot more expensive than electricity , and you have an ICE to change oil etc. 

      Her dad doesn't have any spare money. So it's going to be financed even if it's used. 
     Used loans have a higher rate than new car loans.  Plus used typically is for a shorter period.   So the payments are higher. 
    We can get a new Bolt(?) for about $300 a month.   She makes $300 a month cleaning our house.   So every other Saturday she comes over and cleans our house.   That just isn't stressful.  ( and yes if she's got a game or something else going on we work around it).  
    Finally, she's 16 and a full time college student already with 9 college credits.  
    Maybe she is a little more mature than most 16 year olds?  

Frenchy,

Literally every person here has questioned the decision you appear to be making unilaterally. Maybe you should ask your grand daughter what she wants? Maybe you should reflect on 3 pages of solicited advice that do not appear to reinforce your decision. 

If you feel strongly that she needs a new car and you want to help why don't you flip the bill? She is going to get plenty of learning about debt and hard work with the path she appears to be on. 

In reply to frenchyd :

You know something else that stresses young people?

Older people who won't treat them like adults. 

frenchyd said:

STM317 said:

frenchyd said:  

    Teaching children to be responsible and use credit wisely is what modern parents should be doing. 
   

I agree. But a 16 year old taking on car payments isn't safely and responsibly using debt. It's adding a completely unnecessary burden. There are perfectly legitimate reasons why a 16 year old can't get a credit card or take out a loan.

If you want to teach her about responsible credit use, make her an authorized user on one of your credit cards, and have her use it just for gas for her car, paying it off every month. It gets the same point across and builds proper habits with much lower burden.

Also, multiple times now you've mentioned Volts in unusual context so I want to clarify to avoid confusion. The Chevy Volt that I'm suggesting was a Plug-In Hybrid (like the Prius Prime you're considering and others) with an all-electric range and supplemental gasoline engine. They're super reliable, efficient, and cheap/easy to operate. The second generation (2016-2019 model years) has over 50 miles of electric range. They haven't been made since 2019 so buying used is the only option.

Chevy also makes the Bolt, which is a fully electric hatchback. That's comparable to a Leaf, and can be bought new or used.

 Yes I often do misuse Bolt and Volt.   I  do agree it's a viable choice.  Last I looked ( admittedly briefly) they were actually selling used for the same price as new.  
    The hybrid  offers flexibility. But at a cost.  (Gas is a lot more expensive than electricity , and you have an ICE to change oil etc. 

      Her dad doesn't have any spare money. So it's going to be financed even if it's used. 
     Used loans have a higher rate than new car loans.  Plus used typically is for a shorter period.   So the payments are higher. 
    We can get a new Bolt(?) for about $300 a month.   She makes $300 a month cleaning our house.   So every other Saturday she comes over and cleans our house.   That just isn't stressful.  ( and yes if she's got a game or something else going on we work around it).  
    Finally, she's 16 and a full time college student already with 9 college credits.  
    Maybe she is a little more mature than most 16 year olds?  

On one hand, you talk about cars being so well made that they last 20 years. And you then talk about how many potential problems a car with 50-100k miles has lurking within like some kind of boogeyman. It can't be both ways.

On one hand, you talk about the many things that teens already stress about, and then you talk like making a car payment and adding money stress is no big deal. Again, it can't be both ways.

You're advocating for 100% of her income to go to the car payment. In what world is that teaching her about responsible use of credit/debt? That leaves nothing for registration, insurance, fueling/charging, or any other car related expenses. It also doesn't leave anything for food, or fun with friends, or anything else that a teenager might want to actually have some joy in their life. Let her spend that $300/mo towards text books or lab fees instead of a silly vanity purchase like a new car.

It seems like what's been done so far in this girl's life has resulted in something really special. Don't rock that boat! Keep doing what's been working! Let her focus remain on her studies and athletics, and not on growing up too fast by taking on debt and having to work to spend all of her income on a millstone of a new car.  There's zero reason to add more stress and responsibility to a minor child's life when there's already so much going on, and she's doing exceptionally well.

In reply to frenchyd :

$300 a month for 72 is $21500 on the road. Please show me what new car you can buy for that, and guarantee it will last with no repairs for 72 months. If she can't fix the 85k mile car now, she can't on top of the payment. Who is paying for insurance? That's extra.

You have convinced yourself that a 16 year old can get a loan (she can't), can buy a new car for $300 (she can't) and will keep it for 20 years (she won't), but you do you. 
 

You want to saddle a 16 year old with no money with a car and insurance payment to "show her good habits".  I wonder why you can't retire? (I know "it's somebody else's fault you can't") but it's not.