she says she's an adult because she bought a car
 

One of my co-workers last summer bought a car on credit for some $7,000, at age 18. She was living with her mom and certainly earning enough to cover the car expenses. Our supervisor was talking about what a responsible young person she was being by buying a car without a parent co-signing on the loan. This responsible young person may never have a post-high-school degree, but hey, whatever works for you!

A cousin of mine who lives in Los Angeles wrote an e-mail I got today sent it to the extended family saying how 'she's an adult now' because she bought a little sports car without anybody else co-signing her (probably big) loan. My cousin also has a job (and a college diploma) and I'm sure she can afford the car, but I'm sure she's not saving for retirement or her kids' college expenses now. :) (Although she may or may not have kids some day.)

I'm just thinking to myself sarcastically, 'wow, that's great'.

Hey, with at least 15 minutes of car ads in an hour on the tv what do you want?
People get brainwashed so easily..................

You sound bitter.

For an 18 year old, student loans are an investment. Car loans are a burden.

cool - one more car. :rolleyes:

Maybe we should start an automotive intervention service to prevent "Oil Addiction" ;o)

Last time I checked it was illegal in New York to sell a car or motorcycle to anyone under 21 without parental consent -- at least I had to get consent when I bought my motorcycle and I was paying cash.

You really have to wonder about a bank that would give an 18 year old a $7000 credit line or the wisdom of paying credit card interest rates when lower interest rate loans are usually available. Of course those lower rate car loans probably aren't available to people under 21.

Stacy

The lending standards have gone way down hill in recent years. I havn't really heard this mentioned in regards to cars so much, but primarily the housing market. I've heard many stories of banks giving someone a mortgage to buy a home simply because the person has a good FICO score, without verifying their income.

^^^ same in Australia,
College/Uni loans are investments
big car debt is a burden
Luckily enough my uni loan doesnt attract interest ;)
Funny enough by the time I find a park and walk to the lecture its quicker if i ride, So i stick with the bike

'A man who, beyond the age of 26, finds himself on a bus can count himself as a failure.'
Margaret Thatcher, 1986

(yeah you've heard this one before, but it's fitting)

Does this really mean that parents would not pay for the car if she does not have money to pay the loan herself? I'm really curious. I have children myself and I feel that I ought to support them even when they grow up, same way my parents are always ready to offer help if I need one. The above situation would mean just higher interest rate (assuming that parents' credit hisory is better than her's), and just plainly stupid.

Not necessarily. I personally know someone who, at 18, went to university to earn a B.A., graduated, and is now driving a school bus to pay off her student loan. There are plenty of "Doctors" and "Lawyers" who are driving taxi cabs to pay off their student loans.

At least with a car, she'll be able to get a job delivering pizzas to pay off any student loan she may decide to get!

Sort of. It means the Loan company will not come after the parents in the case of a default on the loan. The parents could still help.

Depending on the situation it definitely is not 'stupid'

1. Generally the parents are at greater financial risk. They can come after your house etc.
2. Having a loan in her own name helps to build her credit history and credit score.

And technically they are right. She is an adult. Last time I checked they won't let kids buy cars. :-)

-D

The best way to improve your credit score is by not needing credit. One of the great paradoxes of modern society.

Yeah, but how many people can say they didn't buy a car when they were 16-18. I'm showing my age, but in the early '70s, I can't think of one friend of mine who didn't have a car by the time they were 18.

Not much has changed since then. We're still an automobile-centered culture. Darn.

Oh dear, by Margaret's estimation i am a failure and may likely always be one!

(Maybe it is petty but am i the only one that will throw a party when the Iron Lady finally kicks the bucket?)

Plus it looks like i am not an 'adult' either...

So Be It!

:)

No, not bitter. But tone is hard to judge over the internet.

I have no need to be bitter. If I really wanted my own car, I'd have my own car, and if I wanted to drive, I'd drive my partner's car instead of leaving it sitting in front of our apartment.

Im fine with that, I never want to be an adult so I will never buy a car :)

Save the sarcasm, I may be in my mid-50's, but I can still remember the feeling of freedom with my first car, 30+ years ago. It WAS important, and the memory of that importance is still strong in my mind.

Ownership of a car is not important to you (obviously, or you wouldn't be writing here). It is to her. Her values are just as important and justifiable as yours. Maybe not in this forum, but then this forum isn't the sum total of the real world, either.

Syke
Deranged Few M/C

I think they're even more important than his, simply because car ownership is valued by the majority of those in the United States (understatement), and the rest of the world is aspiring to be just like us. Justifiable? I wouldn't say that though. Car ownership and dependence (and all the problems that go with it) are simply taken as a given without any critical thought, but as you yourself alluded to the members of this forum think otherwise.

It should also be noted that cars aren't necessarily that big of an expense, and sometimes simply by owning them, one can offset some of those expenses. After being a die-hard cyclist for years, I finally broke down and bought a car at the ripe old age of 23.

That first car cost me $2600 (5 years old) with taxes and licensing. It was a very basic Nissan sub-compact hatchback with an extremely miserly engine that couldn't have made more than 50 horsepower; a minimalist's dream that didn't even have power steering, a working stereo, or a remote hatch release. I think everyone here is quite aware that $2600 Cdn. doesn't go very far after buying a good bike, trailer, accessories, and proper winter riding attire, but it bought me a car that was clean, solid, free of rust and damage, and ran good. Basic insurance (without collision) cost me $60 a month; I offset that by relocating to an apartment a little further from my college that cost $60 a month less in rent (and was bigger). $15-$20 would fill the tank, and a tank of gas would last me a month driving back and forth to school, work, shopping and laundry. Parking was $60 a year. Maintenance involved an $8 DIY oil change every 3-4 months, a $6 air filter once a year, and $6 in spark plugs every two years. I replaced the only belt the car ever had for $10 once the entire time I owned it. I owned that car for five years, then sold it fast for $1000 when I needed something bigger for my family.

I did the math; it was cheaper for me to operate my car than it was for me to buy a bus pass. More importantly, sykerocker is correct; there are no words that can accurately describe the feeling of freedom; it really is euphoric and stays with you for the rest of your life.

There is one disadvantage; one does tend to gain weight after driving a car for a couple of years. Just wait and see.

I bought a car two months after I turned 16. It was a 10-year-old Triumph Spitfire. I got it for $750 cash, money I'd saved from delivering newspapers on my Schwinn Typhoon. That car was a lot of fun, a constant learning experience, and a pretty good babe magnet.

That car also absorbed a lot of my money, time and attention, allowed me to put myself (and others) in serious danger many times, and made it easy to turn away from my excellent fitness habits.

I don't regret having bought that car, but if I went back to that time knowing what I do now, I'm not sure I'd buy the car. I am sure I'd spend a lot less time driving it.

Interesting. How long ago was that? How much would the cost/benefit analysis change with today's gas prices?

In your case it was cheaper, and you were very responsible with breaking down the costs and seeing which option was better. However, I think this...

Is much more at play with car ownership in America. How many people actually sit down and crunch the numbers the way you did when you got your car? I don't think it's very many. Other less rational factors come into play. People feel they feel to own a car or they'll be considered a loser, so they get one as quickly as they can even if they don't need it. And they certainly wouldn't be the minimalist that you were - they need to get the best. Also many people don't even have the option of public transport like you did, so they really do need the car....

1995. Gas prices are up, but so are the prices of bus passes. Unfortunately, ultra-efficient bare-bone cars (Ford Aspire, Geo Metro, my own Nissan Micra) seem to be largely absent from today's automobile choices. Guess there just isn't that much demand for them.

I don't know that I can agree that a student loan is in investment. I lived at home to save money and had a 45 min drive to school. I paid for my school by working at the same time. WHile it may be impractical for a med student to work to pay for school and a student loan may not be so bad, I still question it. I have heard of way too many doctors getting their first job and having over $100k in student loans to pay off. Even with a doctors salary that is still a lot to have to pay off. Then there are all of those people that end up with $50k or more in student loans, which is especially bad when they only get a degree in something that will get them a job paying $25 - 30k a year. The other problem is too many people decide that now that they are out of college and all grown up and have a good paying that they need to live like that, so they go out and get those car loans. If they would only live another year or two like they were when they were in college they could pay that loan off and save some money up. Instead they are so loaded down with debt that if they were to get layed off and go 2 months without their income they would not be able to make their house or car payments, let alone their credit card bills.

By the way in response to theperson above who said that with all of the new car ads out there it is hard to resist. It is the lenders that make it easy for the people not to resist. It would be easy to resist if they had to pay cash for it. It is much easier to say well it is only $200 a month I can afford that, rather than having to write that $8000 check and see your bank account go down that much.

Well one reason that a student loan is an investment is that the interest rates can be lower than inflation rates, meaning you actually make money in terms of purchasing power. Even if the inflation rate is lower than the interest rates, you're still not losing very much money. Car loans have much higher interest rates, and the lenders are betting inflation won't wipe out their earnings on the loan.

The other reason, of course, is that college graduates make a lot more lifelong income than others. Almost always. Probably the only way a car loan will rais your income is if you buy a taxicab with it.

Ah yes, the Geo Metro - or as my live-in and I called it, The Mousecar. A very nice little package for $9,000 in 1996 (that includes every option possible except automatic transmission). Have wonderful memories of them. If you need a car and can find a clean one, buy it.

Actually, the worm has finally turned. The Chevy Aveo has been a bright spot for GM, completely unnoticed in all the doom and gloom media coverage. Having noticed, Honda's bringing in the Fit, Toyota's replacing the Echo (thank God!) with the Yaris, and Nissan's got something that supposedly will put them all to shame.

It's getting possible to buy a quality car with good gas mileage again, without going to the complexity and expense of a hybrid. Better days are coming. Amazing how self-correcting a capitalist economy can be.

Syke
Deranged Few M/C

Well, a lot of people buy cars when there's absolutely no way they could get one without a loan. They would be scrimping and saving a long time and then buying a car, or not getting one at all, if they couldn't get a loan.

Not that some of them couldn't get a loan even without it being a "car loan".

More accurately, you don't lose money, in terms of purchasing power, due to inflation - which is not the same as making money. I think your second point is closer - you don't get a direct cash return on the money you pay for an education, but it can help you command a higher salary - in this way it could be considered an investment.