Funny how things change. difficult child wanting a loan

Discussion in 'Parent Emeritus' started by SuZir, May 31, 2013.

  1. SuZir

    SuZir Well-Known Member

    Last year has been extremely tough for difficult child in every way and I certainly worry for his future. But that doesn't take away the fact that he has also matured tremendously during the last two and half years he has been out from home. difficult child recently asked if we could possibly give him a sizeable loan compared to his income and as funny as it sounds, and as unfathomable as it had been to even think about it a year ago, we don't really have a problem with it. Even though we are well aware he may not be able to pay it back at least in time, if there is any unexpected changes (like him opting out from his sport career and going to school or making choices for his sport career that would made him paid less.)

    difficult child has started to talk about wanting his own car. He has had a leased car with very good deal through his team, but now that he is changing teams, he of course is giving up that. Depending of there he may end up, he may have a new lease deal available for good price or not. In his back up option the deal is kind of lousy and if he ends up there, he wants to buy a car. Problem is, that he doesn't have the money, nor would he be a good candidate for reasonable priced car loan. You also have to understand that cars are very expensive here. Any decent used car for difficult child's needs is over 15 000 dollars. And by that I mean cars like Ford Focus, Honda Civic and other compact cars, eight years old or newer and with less than 60 000-70 000 miles. If difficult child ends up to his back up option, it is very likely he will be loaned out a lot and will very possibly have to drive around quite a lot in any kind of weathers. We certainly don't want him to drive totally unsafe or unreliable car for that.

    Though instead of loaning him money I and husband were talking about maybe selling him my car and me buying a newer one. My car is little over the price range of what difficult child talked about, but otherwise the type of car he would need. We could sell it to him at the price he has been thinking of and ask monthly payments around the same he has paid for his leased car. We were thinking of me changing cars anyway, though if I sell it to difficult child I have to buy both new summer and snow tires to it first. Both tires have a season or little more left on them to be still legal and that would had been ideal, if I would had been selling it to dealer or someone else, but 'still legal' and 'in excellent condition' makes a huge difference to my quality of sleep when we are talking about the tires under my kid's vehicle. Tires are expensive so there would be no way difficult child himself would buy new ones when old ones would still be legal.

    But anyway, it really made me notice how much difficult child has matured, that the first reaction I and husband had for him starting to talk about us loaning him money for a car, was positive. Two years ago our reaction, would had been "not in the million years" and a year ago we may had thought about it, but been very, very cautious.
    Last edited: May 31, 2013
  2. DammitJanet

    DammitJanet Well-Known Member Staff Member

    Isnt it wonderful when we start thinking of them in a more mature roll? LOL. I tend to like the idea of you selling him your car myself even if you have to put on new snow tires to make your mind be at peace. Keep the old ones in a barn or something for emergencies such as a flat tire. You never know when that could happen.

    I have a Ford Focus by the Love it but have no clue how it would do in snowy climates.

  3. SuZir

    SuZir Well-Known Member

    My car is actually Volkswagen Golf, but also Ford Focus is very popular around here. Maybe not your first choice, if you regularly drive long distance, but otherwise it works just fine. Both Ford Focus and Mondeo (usually wagons, I'm not sure if I have ever seen Ford Focus sedan in real life and also I think I know one person who have Mondeo sedan, and at least twenty others with Mondeo wagon) were among the most sold cars long time here. Still they are very popular. One big differences between our cars and yours is, that almost all cars around here are wagons. I have never owned anything but wagons, husband's first car was sedan I think. Now that there are some SUVs with reasonable gas mileage (remember that our gas prices are high, currently 8 dollars per gallon) such as Nissan Qashqai and Honda Cr-V those are getting more popular too.
  4. nerfherder

    nerfherder Active Member

    I've seen plenty of Ford Focus sedans in Northern California, one of its colloquial names was... er, a two-word English phrase that starts with a profanity, based on the shape of the sedan's back end as being similar to a female mammal in, well, a certain kind of receptive squat. :)

    It's been rare in my life that I've ever driven anything that *wasn't* a wagon. Not just kiddos but groceries, thrift-shopping, garden hauling... my two favorites were my 1980 Volvo 245 and my 1997 Saturn SW2. If the electrical hadn't just worn out, I'd still be driving the Volvo.
  5. InsaneCdn

    InsaneCdn Well-Known Member

    Those 240s and 245s were absolute workhorses... too bad Volvo made the mistake of restricting their line to "luxury" models... which have no where near the quality of those 240s and 245s.
  6. SuZir

    SuZir Well-Known Member

    I loved Volvo 740 and 940 wagons. You could get almost anything stuffed in. Then they had to ruin it and change the back so, that any dog cage didn't fit there well any more. Volvos are still nice enough to drive though. husband drives Volvo V70 and it is quite comfortable for longer drives.
  7. ctmom05

    ctmom05 Member

    Any thoughts about having him apply for a loan on his own first, to see how that option turns out?
  8. Actually Suzir - having him apply for a loan and successfully paying it off would be a real maturity and self confidence boost for difficult child. Even if you had to cosign for it. Not sure what the interest rates would be like.

    I have borrowed money from both parents and the bank and there is more satisfaction with paying back that loan from the bank. It will also help his credit rating.
  9. SuZir

    SuZir Well-Known Member

    We don't have similar credit rating system as yours. So 'building a credit' is not something of concern. He does have guaranteed income only for year and he doesn't have a profession that would be considered safe. He doesn't have any property that could be used as a security. He would not get a loan for longer time than a year. And the amount of loan he wants is bigger than what any reliable source would give him. His pay back plan would be considered far too optimistic because his income is little untypical (and bank would count only part of it as an income) and some of his expenses are smaller than what is considered reasonable by creditors. So according to their math, difficult child would not be able to pay what he actually can. We would need to give a personal guarantee for him to get a loan. And even with that the interest would be high.

    And let's face it, we don't feel good about giving a guarantee. He has matured and I believe he would make an earnest attempt to pay the loan. But if things would get hairy, he could easily panic and start to lie about it. And that could end up with us being in quite a mess (no, we wouldn't get information before it was a mess from the bank.) It could turn so ugly, that it is certainly not worth the risk. If we loan him money ourselves, we are in much safer place with it, both in getting the money and the emotional costs.

    And husband just suggested the way to take off even more of emotional liability if we would sell him our car. We could give it to him against the deposit (he has about two grands saved, he could use to car) and give him account number to difficult child's own money market account which he doesn't have access before he is 25. He would never make an effort actually check to whom he is paying, so he would believe he is paying to some of our savings accounts. Would take a lot of emotional cost off if difficult child isn't able to pay, because we would consider it his money anyway and would also be a neat little piece of tax planning. Not totally 100 % legal, but something you never get caught, because we could always claim that car wasn't worth more than that two grands because of reason x (which no one could prove false.)
  10. Suzir - I like that idea. He is making payments just like he would be at a bank. Takes the parent/child thing out of it by having him deposit directly into that account.

    *And what a wonderful surprise when he turns 25 that he was actually paying himself. :)