Gregory DeLozier, right, with kids Christopher and Rebecca. He says in the last six months, he has paid over $15,000 in car expenses for his kids and their spouses.
This article in autonews.com is a timely follow-up to my first CC from 2009, which I reposted this morning. It’s about parents extending financial help to their adult offspring of the automotive kind, but often at the expense of their own financial security. The premise is that kids saddled with student loan debts or just stuck in fairly low wage jobs can’t afford cars, and their upkeep. Well, parents have always helped their kids to one degree or another, so it’s really about degrees. As in the retired parents (not these) who bought their son (who lives with them) an Infiniti because he couldn’t afford his Corvette anymore after he got laid off. And they feel financially trapped. Really?
There’s no question that getting started in life financially is much more more difficult for most young adults than it once was. I think about how I decided to move to San Diego on a whim in 1976, got a job driving a cab, and made enough to rent a cute little house on the hills with a great view of North San Diego Bay and the airport (for plane spotting). Good luck doing that nowadays.
Student debt, which totaled $1.46 trillion at the end of 2018, is a very significant factor. State colleges and universities were once cheap, as were rents, healthcare and other things, and lots of students paid their way through school with part-time and summer jobs. That’s pretty much old history.
There’s no hard statistics about just how many parents are taking on debt to buy cars for their kids, but automotive debt in the 60 and older category has clearly increased. They now hold 21% of automotive debt vs. 12% in 2010. Auto loans now constitute 40% of their debt load. And total debt load for older, as well as all Americans, continues to rise.
As to the dad in the featured picture at the top:
Even with four of the five children out of the house, DeLozier, 59, is still doing business as the “dealership of dad.” The software engineer and adjunct professor at Kent State University still shoulders four of his children’s vehicle expenses. In the last six months, he estimates, he has paid more than $15,000 in vehicle expenses for the children and their spouses.
“We’re like the circus net below everything that falls. That’s how parenthood is in America right now,” DeLozier said. “Your kids are on a high wire, they fall down, you pick them up and put them back up again. We paid for lots of repairs.”
Though he considers his children financially responsible, DeLozier said they have made some costly mistakes with their vehicles.
A few years after he bought his daughter-in-law a used Toyota Camry, she called him from the road.
“We call that DadStar ’cause they would call me and say, ‘Dad, I’m on the freeway, and something’s making a funny noise,’ ” DeLozier said. “She’s a young professional, a biostatistician, but she’s no car mechanic.”
His daughter-in-law had never gotten an oil change, he said, and the Camry’s engine had thrown a rod.
He knew she and her husband, his 28-year-old son, didn’t have the money to replace it. A few years before, he had co-signed on a Kia Soul with his son after he had hit a deer, DeLozier said. Before the accident, his son was overpaying for his vehicle, a used Nissan Murano.
“He paid like 50 percent more than what the Murano was worth, and at a ridiculously high interest rate. It was like $28,000 at 18 or 19 percent interest,” he said. “The only way he could get reasonable rates was to have me co-sign. This is about access to credit for him.”
DeLozier had an idea for his daughter-in-law. He passed down his vehicle, a Honda Fit, to his 19-year-old daughter and replaced it through CarMax. Her car, another Camry, went to his daughter-in-law.
“She’s got a car now because I was able to afford a new car,” he said. “That trickle-down effect gave two other people better rides.”
And to the parents who bought their son an Infiniti:
In New Jersey, Robertazzi and his wife are retired but feel trapped by their son’s financial situation. He couldn’t remember the last time they took a vacation.
“Here, what I thought was going to be a phenomenal retirement and a phenomenal future wound up just being the opposite,” he said. “Every little bit helps now, and every little bit that’s going towards everything else — it hurts.”
Not surprisingly, The Consumer Financial Protection Bureau says that parents who provide financial support to adult children have lower financial well-being scores than those who don’t. Financial advisers recommend that parents not place their adult children’s’ needs ahead of their own financial security.
From a CNBC.com article:
“Nearly half of families have no retirement account savings at all,” the Economic Policy Institute (EPI) reported, even in savings vehicles such as IRAs and 401(k)s. The median for U.S. families is just $5,000, and the median for families with some savings is $60,000.
Even older workers who can see retirement on the horizon aren’t prepared for it. The median savings for families whose wage earners are between 50 and 55 years old is only $8,000. For those who are between 56 and 61, it’s $17,000, reports the Economic Policy Institute.
That’s not good at all.
This chart clearly shows that older Americans are making up a larger share of used vehicle registrations. What’s not known is how many of those are actually for their children.
Another issue is that the supply of relatively affordable and dependable used cars is actually shrinking, as the market shuns sedans and increasingly embraces SUVs and trucks. The number of new cars sold for less than $20,000 dropped nearly 20% last year, while those costing over $40,000 rose by 7.4%. No wonder a recent survey showed that the number of Generation Z that say that owning or leasing a vehicle was too expensive is much higher than older respondents and even five years ago. Yet in many areas of the country, where suburbs and exurbs are often far from jobs, Ubers are even more expensive than a car because of the long distances involved, and mass transit is all-too often inadequate.
It’s a painful reflection of the fact that that the economy, which actually has consistently grown less fast than predicted every year except one since 2010, is showing signs of “secular stagnation” and has not benefited a large swath of the population.
I feel lucky to be able to have paid my older son’s college costs. He and his GF both graduated debt-free, and that as well as their stable relationship and good jobs allowed them to buy a nice house in Portland ten years ago during the recession. Meanwhile, a very substantial number of their friends are still renting and feeling financial stress of one kind or another.
The growth in younger adults living in cities in small apartments and without cars is one clear reflection. These choices of course ripple through the economy. Home building is still far below its last peak in 2006. Car sales have been playing catch-up, but are expected to droop starting this year. We looked at those factors here the other day. This discussion is of course veering away from strictly cars, but then cars are just a reflection of our current living arrangements and economic factors.
(update: this post is now closed to further comments. time to get back to other things)
What I have been seeing south of the border, for the last 40 years or so, is a relentless call for “lower taxes.” Well, anyone who would bother doing ten seconds of research would realise that “lower taxes” inevitably means lower taxes for the top 1% and screw the rest.
And Americans vote for it. They actually do. They have the worst social system of any OECD country. Those cut taxes meant higher tuition and lower wages for working people. Every other developed country in the world has a public health care system, but not America. That’s because of the Rich White Man Tax. Everything has to flow through the RWMT.
Here is a good example: the USA pays double the share of GDP on health care that Canada does, yet every single public health metric is better in Canada. RWMT.
I see huge attacks on education every time I have the displeasure of logging onto Facebook. Lately, there was meme of drinking philosophy student and a lineman. Both were fiction, of course. The truth remains: if you want to be successful in today’s world, you need a first class education.
Knowledge is power and the Powers that Be know that. Karl Rove once opined, “The only thing that education produces is Democrats.”
The concentration of wealth at the top in America is obscene, but it also appears that my American friends, or at least the ones that “bother to vote,” are comfortable with that.
But the RWMT will continue to be paid.
Like you, sometimes I wonder at America. No public health care system, even in the 21st century – really?
But that meme about the philosophy student and the lineman – I see that playing out another way in Australia. Universities here seem to struggle with the concept of social relevance, to the point of even telling students to educate prospective employers about the usefulness of their arts degree! – while any society will always needs tradespeople.
My dyslexic son left school at the end of year 11, after his homeroom teacher said he’d never amount to anything. We encouraged him to follow his dream, wherever it led. Despite his literacy problems, he got an apprenticeship as a diesel mechanic on his third application, a month after he left school. Enthusiasm and personality. And every month when he had a day off, he’d go back to school at lunchtime with a big parcel of fish and chips and catch up with his mates – that was kinda rubbing the teacher’s nose in it, I will admit, but I digress. He’s now 29, married with two kids, well on the way to paying off their house, in his third job, and is the go-to man in his workplace (locomotive service and repair) when there’s a problem. And he earns considerably more than his mother, a clinical nurse educator with a Masters degree.
Education is great, but what you do with it depends upon your personality.
Best selling author Thomas Frank addressed this in 2004 with his book, “What’s the Matter with Kansas?”. Many Americans voting against their own best interests. Last election, 100 million didn’t vote, in part because the choices were so unpalatable. For perspective, the Canadian Conservative Party is farther left in many ways than both leading parties in the US. Plus six companies comprise a large percentage of media ownership in the States. Thus largely controlling the messaging.
https://en.wikipedia.org/wiki/What%27s_the_Matter_with_Kansas%3F
It’s a re-run for me. Stephanie sent me this link a few weeks back. But well worth a second viewing.
True, and without trying to diminish or distract from Canucknucklehead’s pointed criticism of a specific country’s taxation policies, I’d say the problem canvassed by this CC Newsstand piece is applicable across many countries.
Talking with my parents the other day, they described buying their home in a nice suburb of Melbourne for about 4x their household income in 1974. Right now that house is worth approximately 13-14 times a similar household income.
If our benchmark is ‘the way things used to be’, then we are never going to be able to meet the realities of what lies ahead.
Absolutely. The Western world lived in something of a bubble in the three decades after the war. Which of course is why it was called “The Exceptional Period”. We seem to be moving back to a more historical norm. In the 19th century, it was not easy to establish oneself to the point of being able to marry and support a family in reasonable comfort (in the norms of the times).
The increased competition for shrinking resources is making itself felt. This is not just a phase. And with AGW, it’s likely to get worse with time.
I’ve seen that meme floating around FB as well. And for the record, I registered to vote as soon as I turned 18 in 2006 and have voted in every election since here in the USA (by mail even if I knew I wasn’t going to be home on Election Day).
The people that vote against their self economic interests don’t view themselves as poor but as “temporarily embarrassed millionaires.” You see, someday THEY will be the 1% and want to have the breaks.
I work 3 steady jobs (one full time, 2 part time) plus I do contract engineering work. I’m lucky because I’ve made contacts and connections over the years to have the work I do – and because of the education I received at my University. I was lucky to only have a few thousand dollars in student loan debt thanks to my Pap that passed away, as well as scholarships.
But other people aren’t as lucky. And while not everyone should go to college, the ability to go and not have six figures of debt when you come out should be there.
As far as parental/family help? Yep, gotten it on occasion when emergency struck from my mom – but I paid it back. Mom didn’t mind helping because I always had work and stayed out of trouble. My Dad however told me “when you’re 18, you’re outta the house and on your own.” And knowing that, I never asked him for anything.
Given how wages have stagnated while the cost of everything has gone up, or new necessities have cropped up, is it any wonder the younger generations need help?https://www.forbes.com/sites/patrickwwatson/2018/09/25/real-wage-growth-is-actually-falling/#5a36b4207284
I have never owned a new car, and I don’t plan to unless I can pay cash. I’m almost debt free and I would like to keep it that way. Few of my friends (30 somethings) drive new cars – and one of my best friends still lives with her parents even though she has a FT job. I feel lucky to have an apartment and live on my own while friends of mine (employed FT) struggle to make ends meet.
Of course if I were smart, I’d sell the deVille and Suburban and buy a Camry or Avalon…but that wouldn’t make me very happy. And my cars are one of the few things in life that bring me joy.
“The people that vote against their self economic interests don’t view themselves as poor but as “temporarily embarrassed millionaires.”
Nailed it.
Great jammin’. bookmarked.
WTF is this? I don’t come to CC to read political rants. The “Rich White Man Tax” crossed a line. Attacks such as this would not be allowed on the people of any other country.
This post was removed for a time yesterday but it’s now back which is very disappointing. It is far from the first time this poster has done this. If CC is going to devolve into this crap, well, enjoy wallowing in the toxic cesspool Paul, the one you have claimed you will not allow.
Phil, do you need a safe space?
I’ve discussed politics on many sites. But I will not get sucked into it here because it’s not the appropriate place for it. I don’t understand why people like you feel some burning desire to push your beliefs on everybody everywhere. It’s an insecurity, I suppose. A need for validation.
But I will not get sucked into it here
You’ve obviously already been sucked into it. Not getting sucked in means ignoring your triggers.
And you’ve made plenty of politically-tainted comments in the past. People in glass houses….
I agree it is inappropriate for this site.
What this post neglects is the fact that the middle class in Canada is seriously “hallowed out” and they live paycheck to paycheck due to the high prices for necessities in Canada. Owning homes in Bellingham WA it becomes very clear. One just has to go to the Costco to see that. Lines of cars with BC plates lining up at the pump to fill several 5 gallon gas cans to take home. 30′ of fresh chickens sold out by mid afternoon. Minimarts just across the boarder that move milk and bread like massive supermarkets. And those cars lined up a Costco and filling the grocery store parking lots. Sure there are some new cars but more likely than not they are something like a Versa or Fit.
Fact is that those people cross the boarder and get 7x cents for their dollar and still save enough money to make a trip to the US required to stay on budget. And it has only gotten worse since I lived in that town while attending college 30 years ago. W/o the poor middle class Canadians the economy of Whatcom County would not be anywhere near what it is today.
I can’t feel sorry for those parents. The numbers you presented have merit, however the examples in the article are stupid people doing stupid things…which has always been and always will be a tough way to go through life.
This. Most people get taught some very basic things about cars at some point, if not by their parents then someone else. Knowing to change the oil, maybe how to change a tire by the side of the road (okay, that’s too much these days, I’ll relent).
I know that opportunities are still limited for many coming out of college and student debt is truly a more serious issue than many Boomers are aware of, the days of “I paid for college with my summer job!” are long over.
But why can’t these young people starting out limit themselves to a reliable older vehicle? $3000 buys you plenty of Corolla/Camry, keep an emergency budget for maintenance/repair.
Sorry, not sorry.
“however the examples in the article are stupid people doing stupid things”
Couldn’t help noticing that myself. Also applies to nearly every example I know of personally. Though the people aren’t necessarily stupid (some are) but just ignorant. Why did the one fellow’s daughter not know cars need oil changes? And why did the son have such terrible money sense that he overpaid by 50% for a used car? I know two different highly paid IT pros who are very smart, but one of them bought a house with an interest-only loan, and the other bought one at the top of the market and got one of the worst mortgage deals I’ve ever heard of (aside from the other guy’s interest-only loan) Those things aren’t rocket science, but they are for some reason often not taught to kids growing up.
Agree that it’s hard to feel sorry for folks that get what they want, not what they need and can afford. A Corvette while on unemployment? Where did I go wrong? My last two “like new” cars only cost $15K each and work just fine.
Kind of reminds me of my boss’ daughter, who attended Brown University because she liked the location. Majored in Art History and wondered why the best job she could get was as a restaurant manager trainee. Her dad was not happy, but it is what he let her do.
With respect to health care, we deserve the system that the politicians give us. Obamacare? What a joke. Endless drug ads on TV? Even worse. Let the government negotiate for prices like the private insurers and everyone will be better off.
A Corvette while on unemployment?
You misread. The kid had to sell the Corvette when he lost his job. That’s when the parents bought him an Infiniti.
That may be WORSE, actually. Should have bought him a used Nissan.
Many of these kids, in an entire generation, may never become self-sufficient at this rate and will be a permanent drain on society. Many of them have a feeling that they are OWED comfort and welfare. It’s an entire “entitlement social class” that is growing up. Or NOT.
Wow. Just Wow. Where do you start…Well, for one, it may come as some surprise to youth today, its NEVER been easy, or cheap to drive, nor was it ever smart to be clueless about vehicles, maintenance, money, etc..The list is long. My sister killed dad’s old 318 ’73 Polara by never checking or adding oil. She killed two Vegas the same way.
Credit/credit cards/low interest loans? My first mortgage was 12%. And I was damn happy for it, as rates went higher after I bought.
In my youth (early ’80s/late ’70’s) cheap used cars were just mostly used up. There were no cockroach Corollas (actually there were, but they were pricy) and you just figured it out. As in how to make that POS go just a while longer.
Not to criticize, but it seems folks have been spoon fed the “do what you want/follow your dreams/passion/yada yada).
Maybe if folks pursued education that lead to well paying, in demand careers, the student debt burden wouldn’t be as crippling, rather than getting a “arts history degree” and struggling.
Whining about little Billy and his Corvette? That is just insulting.
You are correct in what the article says. I’m sure the sale didn’t happen right away, as the son might have figured on getting another job quickly. Fire sales usually happen when one is out of options and Mom/Dad force the issue.
I got a loan for $1500 to buy a MGB from my mother. That was 44 years ago. Had a hard time paying it off so I sold it for about $1800 and bought a $400 VW Bug.
https://www.youtube.com/watch?v=RYTZaSBTeYg
Here’s the song that goes with this article 🙂
My “Great Depression Baby” Father believed that a man past the age of 18 was expected to support himself.
He allowed me to live at home for as long as I wanted, rent free, if I kept the grass cut, washed/waxed his cars and did some remedial house work and cooking.
BUT:
If I had tried to “lean on him” for car, credit card or cell phone payments; I would had fallen on my face.
My depression era dad was the same. I paid for most of my own education but was forced to take out a small student loan. It didn’t seem small at the time and the interest rate was 17%.
My kids will graduate from university debt free. I figure this is the greatest gift I can give them.
My Mum was born in ’33, and when I came home from school after sign-in day and told her I’d signed out she just replied “$50 per week – that’s your board starting next week, better go get yourself a job”.
It went the other way for me. My depression-era dad borrowed money from me!
This original linked article illustrates a number of simply irresponsible behaviors and parents that I question. At 28, anybody should know oil needs to be changed – doing so is not physically exerting nor does it take a lot of time. But it’s hard to state whether the problem is irresponsible (adult) children or irresponsible parents. I could argue it either way.
And I do agree that education and health care are expensive, regardless of who is paying for it.
While I’m sorely tempted to say more, I ought not.
I also blame the parents, so the daughter-in-law’s parents didn’t teach her that oil needed to be changed, but he should have at least taught his own son that and as the husband he had a responsibility to ensure that his wife’s car was taken care of, even if that meant taking it for the oil change himself if not doing it again.
The Murano is another good example of not teaching the child to be financially responsible. You have to have really really poor credit to only qualify for a 18% loan or just be ignorant of financial matters and sign what ever the dealership put in front of him.
Ditto for the Corvette, one should not be buying such a car until there is a nice nest egg of money in the bank and replacing it with a late model Infinity is almost as bad of a choice.
I’ll provide cars for my kids if I am able to and help them if they need help with them but part of growing up is being taught what makes sense and what doesn’t. If their cars start costing too much then they will be replaced with a “need” car, not a “want” car. We already have those lessons at home i.e. sure let’s eat out today but realize this makes it more difficult to afford something else etc…the kids seem to get it. Our oldest is in a personal finance class in 10th grade and out 6th grader wants help in opening an interest bearing account for his chore money ($2 per week for collecting and taking out the trash around the house). I think they “get” it. Once they get real jobs/careers I believe I can stay involved in their car choices and help to advise. But financing an unsustainable lifestyle? No that makes no sense for either party.
They also know I’ve enjoyed 45 or so vehicles to date but understand when I tell them that it doesn’t really make any kind of financial sense to do that. Then again it’s sort of a hobby instead of golf or season tickets or whatever, basically choose a priority and what makes sense to you that you enjoy and if you can afford it go for it.
As far as auto debt for those over 60, well, I generally pay cash and see doing that going forward but have in the past happily taken advantage of 0% financing offers etc which I suspect a bunch of that debt may be from the last half decade or so. Not all debt is bad although I try to avoid it. If I end up buying another new car one day and an advantageous rate makes sense then I’d do it (assuming I had the money available anyway, not in order to buy something unaffordable.)
When I was in my early 20s and flat broke, I went without a car. But I lived in an area where the bus was a viable alternative.
My young adult children are driving the kinds of cars the young people in those news stories should be driving – a 1998 Civic and a 2006 Buick Lacrosse.
Health care and higher education have exploded since I was their age. I still vividly recall being able to buy private health insurance for $67 *quarterly*. This was in 1985.
This article reports that a student who worked a minimum wage summer job in 1978 could afford to pay an average full year’s college tuition without taking out loans. Which is what kids of my generation usually did. Now it takes a full time job to pay for full-time college, which means kids are taking on impossible amounts of student debt and/or depending ever more heavily on their parents, who need to save for retirement.
What does that have to do with cars? In the 1970s you could buy a new small car on a first job after college. Out of the question today. There goes a market for automakers. If parents are kicking in, they’re probably spending less on cars than they would be otherwise. Different parts of the economy depend on each other. This is a vivid example of that.
“In the 1970s you could buy a new small car on a first job after college. Out of the question today.”
I don’t agree. There are new cars costing less than $15,000 – some for way less. Ford Fiestas and Nissan Versas equipped in poverty spec are fairly equivalent to the base model cars my friends (Generation X) and I were driving in the late 80s-early 90s. A base model new 323, Tercel or Sentra could be purchased for $6-7,000 in 1989. Using an inflation calculator that same $7000 is the equivalent to $14,200 today. That would also come close to the price of a new Honda Fit LX. A local Ford dealer is constantly advertising base Fiestas for around $10K.
The first car I purchased for myself in 1990 was a 2 year old 323 with 30,000 miles. With a year of factory warranty left, the car minus tax and license was $4,800. It certainly wasn’t my first choice at the time. Vinyl seats, roll up windows and a 4 speed in a dorky hatchback body style wasn’t as cool as the CRX I really wanted at the time.
In my opinion one of the major factors is changing consumer tastes. How many people are satisfied driving base model econoboxes in our current world?
You’re right about the cost. My first new car, a $2000 Pinto, would have cost $15K today.
I should have been clearer that I’m thinking of someone today with heavy student loans because of the inability to pay for college with a summer job like many used to be able to do. Wages are flat while tuition has exploded as shown in the chart I included. They would have a hard time making a new car payment after graduation.
Agreed on both points Jim.
1) No sympathy in regards to car woes specifically, all of these people are living beyond their means. I make a very good salary for my age and I’ve been happy to drive a string of $2000 cars while pocketing the savings.
2) Things are insane in terms of the cost of secondary education and healthcare. Administrations are ever-more bloated at universities, too many students coming in for BS degrees and getting easy loans that they won’t be able to repay easily or at all.
. . . . listen, if your 28 year old daughter in law biostatistician isn’t making it, that’s not really your problem. That’s a good degree which pays well. How do you not know to change the oil? Did this man or his son not tell her at some point? Even my mom knows to change the oil, and she’s oblivious to the point that she has no idea what the gas gauge in her car is for. (y’all think I’m kidding. No. She puts $5 of gas in her car every week, whether it needs it or not, no matter what the price of gas is. We have had many bitter arguments about this.) This article is about wanting to financially enable/keep dependent your kids, not about there’s a problem with cars/car debt. If your well into adulthood kid is paying 18% interest on a Murano, how is he fiscally responsible? Rubbish.
I’m guessing some of this car debt comes from boomers wanting to splurge a little while they still have the chance.
Used Civics and Corollas are good reliable cars. They are plentiful and available at affordable prices.
Agreed, Mark. A ’97-’01 or ’02-’06 Camry with 140-170k miles can be bought for $2500-4500 dollars and with a bit of pre-purchase inspection and “baseline” maintenance can get you another decade of reliable motoring with just some basic upkeep. But by the sound of it, even an oil change is too much to ask from some of these college educated people.
I’m 22 and have owned five cars in six years, every single one for better or worse, came from my pocketbook. I’ve paid rent since I was 18 and never missed a bill since. I’m helping a friend of mine get back on his feet by helping care for his newest car in six years- a 1987 Honda Accord I helped him pick out.
@ MikePDX; 2019 in-state tuition and fees at Georgia State College of law is 17,050. Undergraduate tuition, books, personal expenses and fees for the year at Georgia State is 15,284, some of which will no doubt be offset by pell grants and other undergraduate financial aid. Probably wouldn’t be able to manage that working a summer at minimum wage, but it’s very doable. Yes, things are more expensive than they were 40 years ago, but then again, colleges have raised expectations. Georgia State used to be a commuter school and we had a library and some crummy classroom buildings converted from parking garages. Now, the powers that be have decided we need the old Braves stadium and gyms and new glittery science buildings and a new glittery law school and a more “experiential” university rather than the go to class-go home, good enough. It’s unfortunate in many ways but on the other hand, someone has decided this is the way to go. It’s still affordable, but not AS affordable, and there’s a lot more financial aid money out there too.
Do those prices include room and board or do they assume commuting from the parents’ house? In many locales room and board will exceed tuition costs, then add transportation to that in some cases and it’s not difficult to see how a year of college can easily exceed $30,000. It’s unlikely that many students can pay that themselves by working a job while taking a full course load.
Or, but that can be me being a weird European, you get a 500 dollar car and go…..I never in my life owned a new car, or felt that I needed a 28.000 dollar Murano.
You’re not the only one Pete. Plenty of perfectly functional cars in the $1500-3000 bracket, but you need to be mindful enough to maintain them (either DIY or find a good mechanic). Per this article, that is just too much to ask some of these folks!
I bought this ES300 with 203k miles and a full maintenance record for $1600. Perfectly reliable, working heat and A/C, drove it to work through the fall and winter in 2016, drove it out to PA and back to visit my brother (it’s getting a timing belt done in the photo). Sold it for $2200 in the spring, kind of wish I hadn’t (wanted a cheap truck to use for projects).
I’ll point out (and don’t mean to sound argumentative in case I do sound that way) that you are probably in the 1% of people that are A) knowledgable enough to be able to spot a decent car or be able to ascertain what something needs and how much it would cost to fix/repair, B) Are a “car guy” thus are interested in all aspects including maintenance and what is entailed, C) by dint of A and B are able to figure out if a mechanic on any particular corner is “good” or ripping you off and D) appear to have the free time as well as the inclination to look at multiple beaters in the sub-$3000 category. Like me, you probably consider it fun and a good use of time.
Collectively, anybody on CC reading this article is likely in the top 5% of the above. That leaves a LOT of people that just want or expect or hope for good, clean, safe transportation at minimal cost and otherwise think of their car like they think of their clothes dryer, i.e. it gets zero maintenance and is expected to last almost forever. I personally have no idea if my clothes dryer needs any maintenance, but wouldn’t be surprised if the manual wanted me to check or replace a belt or something every few years. Never done it, not really interested in looking for the manual and finding out…
Not everyone has those abilities, let alone interests. Yes, some people are way on the other end of the spectrum (i.e. the article subjects), but even the average person isn’t very good at it. Assuming your brother wasn’t a mechanic and you weren’t around would you think your mom for example would be able to go out and find a good $2000 car that you’d be happy to have her driving for a distance of 100 miles in poor weather? I assume your mom is an intelligent person but know nothing of her, but in my experience most (most!) people’s moms don’t know jack about cars or what makes one better than another. If there’s a noise, sometimes they will take it to the mechanic and maybe get fleeced. Sometimes not, and then there may be a call to AAA instead down the road…
“I personally have no idea if my clothes dryer needs any maintenance”
The only tip I can give you is that you need to wash your lint screen with hot soapy water and a brush once a month IF you use fabric softener sheets. The wax and other ingredients build up on the lint screen and slowly clog it, increasing drying time, utility bills and so on.
Clean out the lint hose and exhaust vent so it flows freely.
https://producthelp.maytag.com/Laundry/Dryers/Dryer_Cleaning_and_Care/Cleaning_the_Lint_Screen_on_a_Dryer
The internet helps with everything! Thank you, that was great, I will do so and teach my kids so they don’t ever have a clogged dryer that they ask me to replace when they are older.
Jim, he may be more knowledgeable about buying cars than most people but it is still no excuse for the bunch of imbeciles described in the article as well as for many other people. Particularly not when you have tons of vids on YouTube explaining how to buy, maintain and repair used cars. And there is a little thing called “common sense”. When I decided to go back to study at 35, it was clear to me life the next few years will be VERY modest, and so were my cars, none of which was younger than 12. Yes, I used to work on cars for living before that but again you do not need to be a car mechanic to do the basic, preventative maintenance stuff, and if you ask around you’ll find people “in the know” who would help you when looking at cars to buy.
I add the same applies to living in general, and let me tell you working every minute when I was not occupied with study was no fun, as was not having any social life. Younger people today have been brainwashed to think that everything should serve the purpose of self-fulfillment and must be “fun” so that when they encounter any obstacle they fall apart.
But maybe that’s just gruff old me.
3rd attempt at posting a response (has this been a common issue Paul N?)
Jim I think it’s not unreasonable to expect a functioning American adult to have the agency to ask their friends/family/co-workers a few basic questions like “Hey do you know someone that could help me shop for a used car?” “Do you know anyone selling a well kept older car?” and “Do you know a trustworthy mechanic who could take a car I’m considering buying?”
My brother maintains a whole fleet of older beaters for a number of grad students and entry level employees at his place of employment in State College. A perfectly typical example is a grad student from Florida who drove up to PA in a sun-burned 2001 Camry with 140k she bought at a used car lot down there, not knowing much about cars. It had out-of-round Chinese tires on it, some oil leaks, an EGR related CEL, some noisy strut mounts, and a noisy timing belt. After reviewing what needs to be done, she and my brother agreed to leave the strut mounts alone as they are noisy over certain bumps but not unsafe to drive on, he put some General Altimax RT43s on (his go-to for affordable and good performing tires), replaced the timing belt with a Toyota OE belt, addressed the CEL and oil leaks. She’s can now safely and confidently drive this car down to Texas for a summer internship no problem, and should easily get through the rest of grad school with minimal investment in the car (maybe the strut mounts if she’d like). Compare this to leasing. Even a really cheap $200/mo no money down lease for 3 years would leave her $6k in the hole at the end of 3 years and no car to show for it.
Debt is a choice.
Welcome to reality.
Choose wisely.
College educated victims need not apply.
Whoa. I’m hearing a lot of “back in my day” curmudgeon talk here. I’m not defending a young couple who doesn’t know better about oil changes; and as far as the kid who had to part with his Corvette, the article wasn’t clear if it was a repo or a sale; thearticle also wasn’t clear if it was a new Infiniti or a low-priced old Infiniti.
I’m not too sympathetic for these kids with college debt. College debt certainly would cramp one’s style. The reported average is about $30k, that’s hardly insurmountable. I see these same kids come on the lot and not blink an eye at $30-40k cars. And more for trucks. Also, 18% interest on a Murano isn’t that bad. Obviously y’all have forgotten what it’s like to be young, with no credit history (not joint credit), and tired of hearing how you “overpaid” for this, that, and your shoes. Think 18% is high? Try a “buy here-pay here” lot. Say what you will, but if your mistakes and circumstances only allow that as an option, it’s a damn sight better than walking.
I was there. I haven’t forgot. My aunt co-signed my first auto loan on a ‘80 F-150 in 1984, at 15%, a good rate back then. I made those difficult $125 payments on time knowing she would snatch it and sell it if I let her down. My first loan of my own? In 1986 I got hoodwinked; my aunt told me rates were down, but I let a finance manager tell me I had to “pay” to build my own credit. At 23%. I didn’t tell my aunt. Three years later, after working and beating that Toyota truck to literal death, it got repo’ed with just a few months left. I had to borrow a down payment from mom to get the “buy here-pay here” Isuzu truck. At some ungodly high 20s or low 30s rate. But I was riding, and more importantly, still working. Suffice it to say the 80s and 90s were my “party years”, which explains a bit, and truth be told, I’d have never made it without my parents’ financial help, which strained my relationships with them and other family members. My next two trucks were also “we finance specials” that received poor care from me. It wasn’t until my mid to late thirties when I started to get it “together”. I quit the party lifestyle, and grew up. I established good credit, took care of my high dollar purchases, bought my home, and came to realize life is cold and hard, why make it worse? Let’s also say the parents were no longer around to “bail me out”. It literally became “sink or swim”. Looking back, I’ve come to believe my parents did me little favor while they were “helping” me, even though at the time I thought they were. They didn’t want to see me fail, yet I learned some of the greatest lessons in life are learned from an empty stomach, an empty wallet, and a broken heart. I’m sure they knew that, too; but another lesson I’ve learned in life is things are easier said than done. Heck, I recall as a small child some of my parents’ own mistakes and blunders as young adults, and them seeking help from family. Even my grandmother, who lost my grandfather in WWII, with one toddler and one on the way, would tell me some of her trials and tribulations as a young widow in the Deep South.
While times have no doubt changed, I believe the more they’ve changed, the more they’ve stayed the same. Life is hard. And yes, it’s harder if you’re stupid. But aren’t we all?
Hesitant to criticize the car choices of others for their children. We all have different budgets, priorities and circumstances we must balance.
Starting with my oldest, when she turned 16 (in 2006) we bought her a ’96 Honda Accord 2-door. She drove it all through high school and 3 years of college, and after that she drove our then 6-year old Acura MDX for a year until she graduated.
The Accord got handed down to her younger brother who by then was in college and had been driving an ’01 Nissan Sentra which we had supplied to him when he turned 16. The Sentra had been very unreliable (a real POS), so the older Accord was actually a step up in reliability for him and we didn’t want him to risk getting stranded on one of his occasional 7 hour trips between school and home.
Oldest daughter graduated college and moved (car-less) to the east coast, and we sold the MDX. Meanwhile, the Accord, after suffering through two teenage drivers started to require significant repairs, so we sold it and bought a new ’13 Ford Fiesta for sonny boy, again for him to have a more reliable car.
Then son graduated from college and his grandmother gave him my recently deceased dad’s ’12 Jeep Grand Cherokee, which he still has. Of course, he complains about the Jeep’s high insurance and operating costs. Let’s see, free nice SUV…cry me a river, kid!
The Fiesta we handed down to our youngest when she turned 16 and this is what she currently drives. She graduates from high school this May and will go on to college in the fall, but the Fiesta is still in good shape and cheap to operate/insure, so I anticipate she’ll have it for quite a while.
Ah, kids & cars…gotta love ‘em!
Then son graduated from college and his grandmother gave him my recently deceased dad’s ’12 Jeep Grand Cherokee, which he still has. Of course, he complains about the Jeep’s high insurance and operating costs. Let’s see, free nice SUV…cry me a river, kid!
As someone who’s parents, unbeknownst to me, decided to “gift” me a brand new car when I turned 16 and got my license, this rubs me the wrong way. The car was contingent on me paying the insurance, and taking over the remaining payments at 18. Insurance was astronomical since I was the primary driver. I couldn’t afford collision coverage (insane my parents allowed that with a new car). 30 hours a week covered the gas and insurance, so I was essentially working to drive to work. It was a catch-22.
The worst part of it all was the car was a lemon. It was constantly breaking down or having to go into the dealer for recalls. I knew pretty early on this wasn’t sustainable, so THE DAY I turned 18 I cashed in some savings bonds, paid the car off, and got it titled in my name only. Immediately I went on the hunt for a good used Toyota, found one, and traded the Ford in. My parents were LIVID. I was not sorry their “gift” of financial stress and an unsustainable image of having made it for an unreliable money pit wasn’t compatable with my finatial abilities. It took years for them to shut up about it. I would have been vastly ahead financially if that never happened, but who in their right mind says no when it’s already in your driveway?
When my son inherited his grandpa’s Jeep we talked about it and I told him he’d get tired pretty quickly of paying the freight to own and maintain it. But a free 3 year old (at the time, 3 years ago) barely used Grand Cherokee Laredo with all the bells and whistles — including a kick-ass sound system — was too good a deal for him to pass up, and I can’t blame him. Anyway, he’s recently been talking about selling or trading it on something more economical. Live and learn.
I have sacrificed mightily so that my children will not have large college debt. One graduates in May with $15k in debt. The other is on track to graduate in 2021 at $20k in debt.
But then I will cease being the Bank of Dad. I will cosign nothing. They will need to live within their means.
That doesn’t mean I won’t help them in a true emergency. But as so many others here have said, if they need a car, $3000 buys a lot of used Corolla.
Heck, my kids’ stepdad is a savant at finding used cars. My younger son was in an accident that totaled his car. His stepdad somehow found a 2000 Saturn with 30k miles on it for under $2,000.
I hear you!
In the past decade:
-I sent my wife to university. English is not her first language, so it took seven years total. She’s now a CPA.
-I got my daughter prepared to enter an Ivy League school. She’s in her last year and on a full scholarship.
-I am now sending my oldest son to university. He is studying French, Japanese and Chinese. He wants to be a diplomat.
-I am preparing my youngest to enter the University of British Columbia next year. He wants to be an engineer.
There is ZERO student debt for ANY of them. I paid the whole thing.
I didn’t drive a $50,000 truck to do this.
That was my parents’ mentality and mine as well. Scrimp and save wherever possible to pay for their childrens’ education. Driving a fully depreciated older car and living well under our means is what allowed my wife and I to knock out her medical school loans in fairly short order. Her friends shopped and partied and lived in nice apartments all through medical school and residency, rolling it all into their debt load under the assumption that once they start practicing they’ll easily knock it all out. Chances are, with that new paycheck will come yet another big lifestyle upgrade. According to “The Millionaire Next Door,” physicians are some of the worst high-earners when it comes to building wealth, and looking at anecdotal evidence I can see why!
I sold my old cars to my kids for half of KBB.
“Though he considers his children financially responsible, DeLozier said they have made some costly mistakes with their vehicles.” The maintenance and buying mistakes he outlines show that his children were not being financially responsible. Many of the contemporary books outlining economic and social crises of today contain numerous examples of individual behavior such as these that undermine the authors’ contentions that structural and policy problems are responsible for the “crisis.”
At the same time, having worked in university administration for forty years I can offer the observation that higher education is far more expensive today for a variety of reasons, many of which have little to do with the cost of educating students. Massive amounts of regulation entered the industry decades ago that contribute to bloated administrative coasts. Some of it seems reasonable and necessary (e.g., accommodations for the disabled, IT privacy law and security needs), some of it seems overblown (e.g., the massive amount of legal staff devoted to diversity training and compliance, etc.). Also, the “market” – i.e., student and parental demands – raised the bar for luxury dormitories, gourmet and special food requirements, climbing walls, et al, that my generation would not have considered essential or important. And federal and state tax policies that indulge the ultra rich have pulled funding away from public universities and made them dependent on raising tuition (and student loan debt) and raising money from wealthy individuals and corporations (the administrative costs for these development activities themselves are very high) who then dictate how they want the money to be used that is not always in the best interest of education or lowering its costs: (e.g., read Joshua Hunt’s The University of Nike: How Corporate Cash Bought American Higher Education about the corporation’s uneasy relationship with the University of Oregon).
One could go on about why life is more complicated and expensive today (environmental standards, building regulations, safety standards, et al) while being careful to avoid inter-generational stereotyping and conflict.
One development I find encouraging in some school districts is a new focus on educating students on personal finance from a very young age. My parents and grandparents did this for me (my paternal grandparents opened my first bank account when I was born, I had my first “job” and checking accounting when I was 14 due to my parents). IMHO, living in this financially complex state economy that requires so much individual knowledge and skill for folks to survive and prosper also requires lifetime training: at every stage, from youth to retirement and estate planning.
Good point in the last paragraph about teaching financial literacy, The people described in the article are at an age where the school system went “back to (easily testable, and boy did they test) basics” under No Child Left Behind, and things like financial literacy as well as “extras” like auto shop were dropped from the school system to the extent they were still hanging on.
Yeah when I went to HS many years ago there was a personal finance class as one of the electives. One of the things we had to do was go through the want ads and find a job we were qualified for, ie minimum wage, calculate how much we would bring home in a month after taxes and unemployment insurance. Then we had to find a place to live and create a budget given our hypothetical income.
By the time my kids made it to HS age 30 years later personal finance classes were long gone.
Man many folks down here think Americans have No financial issues and USA government is taking care of every one and helping every person out but apparently it is not the case
Uh, no, not even close. Everyone DOES in theory have opportunity and can make of that what they will which is better than in many other societies, but as far as everything being handed to everyone on a platter, not even close, no matter what some would have you believe.
There is a “social safety net” of sorts but generally by the time you’ve fallen far enough to get caught by that, things are really, really bad.
I understand the costs of post-secondary education has increased dramatically, but why do young people need to by such expensive vehicles right off? What happened to the good old beater? Used cars used to be a sketchy proposition and have questionable reliability, but now finding a cheap and reliable used car isn’t a problem. It seems today, more than ever, the instant gratification of having a nice car or other possessions is a must. What happened to getting by with little and saving for the future?
I guess I am wired differently, because as much as I love cars, I have never been willing to sacrifice my financial stability for a car. I have generally bought the cheapest car that meets my needs, especially when I was young and starting out. In my case, I was lucky that after I finished University I got a good paying job. I kept my worn out University car for 5 years after school, so I could first pay off my student loans and then start saving for a down payment on my house. And even after I replaced that car, I bought another cheap used vehicle. Those choice I made then, have had a massive positive impact on my finances today.
I think the comments about financial literacy hit the nail on the head. My wife is currently involved in a research project at the University involving introducing financial literacy at the elementary grade levels, starting with Kindergarten. At the present, most High School and University students have very little knowledge in this field. I was lucky that I had hard working immigrant grandparents to teach me, but many kids today don’t have this, so we need to better educate our youth.
Many sectors of the economy will be in a world of hurt once the collective wealth of the boomer generation finally evaporates. As for me, though being 39 and in the highly educated demographic, the number of contemporaries I know who can’t afford new cars vastly outnumber those who do. Naturally my observations are purely anecdotal, but it appears my observations are not unusual.
As for me, I’ll never be able to afford a new car, or even one that’s moderately used. For the last ten years my automotive diet has consisted of twenty year-old beaters, and I’m okay with that. I drive all of 300 miles a month, so I don’t require much in terms of transportation.
The part of this equation that perturbs me is that I would love to dispense with a car altogether. Unfortunately I don’t have the luxury of doing so. Most of the urban centers in the United States where I could do this, I simply can’t afford to live. So I’m left with feeding, supporting, and housing a 1997 Camry that sees very limited use. Again, I suspect I’m not alone in this conundrum.
My beaters have generally been reliable, but like anything mechanical they do require the occasional repair. I just spent the better part of $1000 on a timing belt, water pump, and tires. These are all routine wear items and such monetary expenditures are not unexpected on a car with 291,000 miles. Yes, you read this correctly.
But here’s the thing… Whenever I have to kick money into a car, I can’t help but think to myself, that’s money that I’d rather spend on travel, which is my true passion. The grand that went to the Camry could have easily paid for a week in Mexico!
That sure is high mileage for a 22 year-old Camry what was it being used for before? Right now I have a 26 year old Camry with 258,000 Miles and occasionally I have to throw some money at it for repairs as well as routine maintenance.
I live in Tualatin and drive to work since that is cheaper and quicker to do than public transit. Would be nice to live closer to the urban core and take public transit or bicycle more places but I cannot afford the rent.
Teddy, would you believe it was a car that was in the same family for 20 years? The title was the signed over to me listed 17,000 miles. As far as use, it was just a daily driver.
The average mileage driven per year in the US is 13,500. Multiply that by 22 years = 297,000 miles. Teddy, your Camry was driven significantly less than that per year.
Thanks for the information you two. Food for thought for sure since I did not think about average annual mileage until now. I am driving the Camry about 12-13 thousand miles a year.
This article and the comment sure are food for thought since these situations sound familiar.
I think of my dad who got financial help from his dad to buy a brand new Saab (mostly used by him) in the late 1980s when he was around 30. I also think of my mom who around the same time bought a few hundred dollar 1970 Dodge Dart from my Great Aunt’s Estate with her own money since the truck she had was too rusty and unsafe to be in while pregnant.
In 1995 when both my parents were around 40 my mom’s mom helped them buy a brand new 1995 Plymouth Voyager which was safer than the Dart and more reliable. My dad bought a used Subaru Legacy in the late 90s with his own money which I’m sure he was proud of. Since then Dad has bought two used Legacies with his own money and they’ve helped each other by a new Sedona back in 05.
My parents bought my first few cars for me or they were hand-me-downs, but I started buying my own vehicles a few years ago. Right now my fiance and I have a high mileage 1993 Toyota Camry and a slightly high mileage 2004 Toyota Sienna we rely on for day-to-day driving and road trips. I would not have been able to buy the Sienna without the inheritance to my late grandmother though. I am trying to save money but I worry that I’m going to have to ask my family for financial assistance when it comes to getting another vehicle. If that ends up being the case I’m going to have to be humble and of course I don’t want anything too fancy.
My parents gave me a $1500 VW Cabriolet my senior year. It was a one time gift and that’s it. I was dumb and trashed it inside of a year, but a job the summer after high school allowed me to spend $2k cash on a base CRX. A few years on and a Bronco killed that car and savings again allowed me to buy my truck cash. I didn’t want college yet so I joined the military to figure out what I wanted to do AND earn money for college. Trade schools are pretty open these days and those careers will allow one to make some money. You may not be rich, but you’ll pay the bills. If you give 4 years to Uncle Sam he will give you and your dependents free medical and cheap dental, pay for some college while you’re in, and give you or a dependent 36 months of college with a housing allowance when you’re out! How’s that for helping you get on your feet? Granted, that’s not a path for all, it’s just another option. As for not changing your oil and blowing up your engine: you ignored required maintenance and there are consequences for that inaction. You pay for your mistake and hopefully move on with a lesson learned. Point is that we all need some sort of help in those early years, but we (young people) should work to gain independence from that as early as we can because if we wait until we can comfortably afford the house and car we want (vs need) on our own, we’ll never get off of the “Bank of Dad.”
Thanks for the article Paul.
You’re a gifted writer on economic and social matters just like you’re on old cars.
I understand the point many commentors brought, but, IMHO the main point of the article is about how too low entry wages (the reasons for this is a matter for another article) combined with rising living costs (e.g. university) and the high indebtedness these both events bring to younger adults. An additional factor underlying may be that middle class parents today have less children and are generally more “richer” than their children than it was the case with parents of 30 or 50 years ago.
Is this ‘the entitled generation’ playing out in another way?
I had to buy my own first car. I knew there was no way my parents could afford to help me. I didn’t know anyone whose parents bought them a car.
My daughter’s first car was an ’84 Suzuki Swift, a hand-me-down from a great-aunt who had stopped driving. She loved that car, but replaced it with a Honda Jazz when she started earning. That needed a loan from the bank of Mum and Dad, since repaid.
My son had an apprenticeship when he got his first car. That took a loan from the bank of Grandpa, which turned into a gift when he went to repay it. That was a special case.
Canuck: I have read the entire thread so far but revert back to what you wrote above. It is deeply offensive to me as an American.
You decide your country’s tax policy; leave ours to us. Our domestic economic policy is not your business nor your expertise. I don’t dislike Canada nor Canadians; I don’t even think about Canada. Just note that your Prime Minister, not our President, is the one just hanging on by the skin of his teeth due to financial scandal.
Your attack on American tax policy is irrelevant to a discussion about indulgent parents coddling adult children with vehicular support. And the situation has nothing to do with our USA tax policy; your country likely has many examples of this silly parenting situation.
I am quite receptive to your opinions about vehicles and about seniors financing cars for adult children. But I am unwilling to respect Canadian criticism of American taxation policies. Mind your own business and worry about your own country’s tax policy. And keep your GST for your own purposes; I don’t want it here in the USA.
This is a site for cars and car people – not for Canadians to mock Americans for our domestic political choices.
I suspended our no-political comments for this post. But that applies to all commenters, not just blue-blood Americans. FWIW, America has a very long and deep history of meddling in the politics of other countries, right? So as far as I’m concerned, if there’s to be political comments, they’re just as welcome from the citizens of other countries as from this one.
I disagree wholeheartedly with the notion that a Canadian can’t have well-informed and relevant opinions about US tax policy (and I’ll leave it at that: please let’s not push this any further) but I do agree that the original comment was unnecessary, borderline irrelevant, and definitely not in keeping with the non-overtly-political tone of this website. I realize that politics can be pertinent to (and sometimes inextricable from) cars, but healthcare is a tenuous connection, at best.
I fear I’m seeing CC stray a bit from its original premise here. I understand that the website has covered so many cars that there may not be all that much more material to cover, but I think opening up the fray to political discourse is a fork in the road best left untaken. I’m hoping this is a one-time diversion from the usual.
That said, it’s Paul’s website and it’s completely his choice to alter the policy. It’s not my decision to make. But I’ve seen mentioned many times before by other commenters (and I agree) that this website has long been an oasis of civility among the relentless politics of everyday life. I’d hate to lose that serenity.
Debt is a four letter word. Debt is not prosperity.
Memorize this and refer to it often.
The judicious use of debt is a stepping stone to prosperity. Taking on debt intelligently along with living under my means is what has led me to have a significant net worth.
What is often neglected in articles about student debt is a mention of choices made. Go to a public college in another state and pay out-of-state rates plus housing and transportation. Go to a private college either nearby or in another state and pay through the nose for tuition, housing, transportation. Or, go to a community college for two years, live at home, and save some money. Plus, one needs to consider a career that you can make money at when you graduate. I have a niece who drifted from one major to another in college because she didn’t do well, then end up with a degree in environmental geography because it was easy. Four years of experience later and she still doesn’t make any more than a secretary.
But there’s tremendous leverage between where you go to college and how much you’ll get paid over your whole career. Different colleges and universities have very different quality and status. They vary widely from state to state as well.
It’s certainly the case in engineering. Straight As from a 3rd-level school won’t get you a second look at most high-tech companies.
If you think you can qualify for an expensive first-rate school but you don’t have the money, you can gamble on a student loan. If you make it into that top-level career, then the gamble was smart. If you don’t they’ll call you a fool and you’re buried in debt. All for being ambitious and believing in yourself. What a country.
I’ll be 25 at the end of this month & know I’m in a much better financial position than most young adults around my age. The high cost of going to a typical college or university is one of the biggest reasons I went to Piedmont Technical College in Greenwood, SC. Alas, without a full-time paying job back then, even that became expensive after 2 years including summer semesters as well as night classes, in addition to paying for gas to fill up the Aerostar during those long commutes; scholarships won’t go but so far. I believe I did well by graduating with an Associate Degree so I could at least begin searching for a full-time job that I could qualify for & still get a good steady income. I still live with my parents but I’m able to pay for most of my own expenses (no issues with credit card or loan debt) AND I help as much as I can with the house & yard work when I’m not completely exhausted from my job. A lot of the stuff I learned while in college also gave me good if not proficient experience in automotive & electrical maintenance, like when fixing up the Nissan Trailer for instance: changed BOTH of the wheels, replaced the tail light bulbs & lenses, checked the harness wiring to eliminate exposed connections, etc. And I do know the basic maintenance procedures of general under-the-hood work–oil change, air filter change, transmission fluid check, battery fluid check, tire gauging (technically not under-the-hood but you get the idea)–but it’s still safer to have 2 people doing the work together (in my instance me & my dad) to reduce the chances of something getting done wrong. I’m definitely WAY better off than most others in car payments as well–I paid for the Wells Cargo Trailer, the Ranger, AND the Astro all at the full listed price on site at their respective dealerships–no monthly payments necessary! Reducing or even eliminating nonessential expenses helps a lot to make this possible. You don’t always need the latest & greatest thing on the market in order to have fun either–look what I’ve been able to do with what I’ve had up to now! True, I may want better things in the future, but at the moment I’m simultaneously thankful AND proud of what I DO have: a stable home, a good-paying job, reliable transportation, and most of all, loving family & friends.
^^^Here’s^^^ a young man who knows the score. Kudos!!!
It’s all a matter of priorities and having a basic understanding of economics and financial matters. I would die a happy man (20 to 25 years down the road, please!) if parents – let alone our public school system – would make these a priority in their curriculum.
It can be tough for millenials out there, I know in California they won’t have the opportunities afforded to people of my generation. And they have compromised their futures if they’ve borrowed to pursue education and degrees in areas that don’t normally translate to a good standard of living. I’ve emphasized with my own children the need to do their level best and to work harder/be more productive than the next guy. They do that and they should never want for work. IMHO.
There is nothing wrong with a used Civic or Corolla in decent condition!
When I had got my first car in 1998 when I was 20, I had saved all my hard earned dishwashing money to buy a car that I really liked. As I knew that I obviously couldn’t afford a brand new car, I knew that I didn’t want something totally clapped out and uninspiring. I had always liked the G body GM cars of the early 80’s, so I had bought a nice ’84 Cutlass Supreme Brougham. Fancy enough for an older car lover such as myself, that wanted something that I could feel great about with its plush interior and the classic, rugged yet sporty looks, but where I could afford to buy it outright and not be bogged down by big monthly payments for years.
I wasn’t extremely knowledgeable about car repairs, but I could at least do an oil change, and some other basic things, as I’d taken auto mech in school and knew of some simpler maintenance things. I knew that I needed something relatively simple to work on and wrench on, and a carbed setup was more in line with what I knew about working on vehicles, as I wasn’t as familiar with fuel injected engines. Plus, I already knew of some of their problematic areas (rusty framerails, etc).
Contrast this with a 24 year old guy I know at work had finally got a full time job and wanted to buy himself a car. He had got a 2011 Infiniti, which–hey, it’s great to swing for the fences and everything–but he’s starting to realize the issues with buying something like that, where it can be costly to repair if you’re not even somewhat well versed in sensors, electrical and OBD2 codes. One problem is that a check engine light came on a few months ago, and seeing as that he knows nothing about mechanical work, he was hesitant to go to the dealership or a mechanic to get it properly diagnosed, but he didn’t have the money for it……didn’t even have a credit card. That’s a pretty bad place to be in, but he didn’t really think things through.
The other good thing about getting a more run of the mill base vehicle, is that there’s far more of ’em at the wrecker, and it’s cheaper and easier to find parts for. Expensive luxury sedans with high compression performance engines just don’t show up in the wreckers very often.
Most auto parts store will read codes for free or Harbor Freight has reasonably priced code readers. Depending on the Infiniti, the broken part could be an off the shelf Nissan part. A simple Google search will tell you what fits what.
And after my cranky old b*stard pontificating, I have to admit to buying a new ’74 Fiat X1/9 after graduating from college and having my job for a year.
I never claimed I wasn’t a hypocrite.
Besides student debt, which could be somewhat controlled by attending a community college for a couple of years and by working either p/t or f/t, ( I chose f/t). The other biggie around here is the high cost of rents. The average two bedroom in my area rents for a 2,400.00 a month, or more. My son and his fiance rent a single room, yeah it’s the Master bedroom, but they pay 1,300.00 a month, in an outlying suburb. My Son makes okay money, but he’s a car and motorcycle guy like his Old Man and I don’t begrudge him his pleasures especially since he’s paying for them himself. We are only young once.
The cost to purchase housing is astronomical around here. San Jose has been said to be the most expensive place in the country to buy a house. I kind of find that hard to believe, wouldn’t S.F. be more expensive? I live in an average middle class neighborhood of million dollar plus houses. Luckily I bought mine thirty years ago! Two miles away from me is the 3 bd. rm 2 bath town house that I bought new in 1985 for 105K, Today they are selling for over 650,000 bucks. No wonder young people Today are so depressed, they don’t see much of a future for themselves in many areas.
Preferring not to get too political on this forum, I consider myself lucky living and having gone to university in places where a car isn’t an absolutely necessary proposition. Sure, driving is cheaper in NA but not by that much and hard to sustain on minimum wage, let alone when also attending university. Cars are heck of a lot more complex to maintain than bicycles or even old cars – and even that is hardly for everyone. Yes, you can keep on eye on the oil and coolant level, no, not everybody has got the skills and tools to replace the timing belt or a broken coil spring themselves. That steers one to either farming it out or getting a vehicle much less prone to break down: a newer e.g. more expensive one. Next to impossible to sustain on a low budget, and that’s not even getting into high rents worldwide as well as dodgy healthcare and tuition fee pricing in the US.
I’ve had my share of boneheaded automotive decisions in my uni days but they were entirely of my own volition – primarily as a hobby I purposely spent money on – and bus, train and bike were always a backup option if necessary and for many, the only realistic option. Keeps everyone mobile within their means.
I think the sword cuts both ways in this situation.
Did the kid need an Infiniti, or would a used Corolla have done?? Even if he didn’t like the Corolla (nor his friends), it would have been an incentive for him to persevere to a higher economic status. With the Infiniti, he has no need to pull on his boot straps and move up.
What the hell???
I literally don’t know where to start, and more importantly, stop.
College and the medical drug field are among the biggest scams in the United States,public schools quickly follow. We are the largest field of cattle in the world for the powers that be. The punchline is most still think we are a free country.
Fact is most of these parents, and many like them are the root of the problem.
Having made my money in real estate and being a real estate broker fact is many of the parents of these millennials are the root of the problem. I watch the count courthouse sales and the fact is the majority of home that cross those steps do so due to the poor choices of the owners. It is always fun when the location is one where google street view has made a number of passes over the years.
One that sticks out was a local house whom the owner’s purchased many years ago for a fraction of today’s value. However every time values went up and interest rates went down they used their house as a cash machine. So that house they bought for $200k with a $180k loan 20 years ago was now 80/20’ed to the overinflated value from the peak of the market, so they owed $500k on a house now worth $400k and could make the notes. Looking back through the google street view the modest cars were replaced by a Mercedes and a lifted crew cab pickup and it was joined by a 35′ motorhome and a 25′ boat whose ages lined up pretty good with some of those cash out refinances. This is not a isolated incidence either, houses that were used as a cash machine to fulfill wants and not needs make up a large percentage of the houses that cross the courthouse steps and that are listed as short sales.
I generally agree with you, but we ought to consider that the government encouraged this when it eliminated tax deductions for interest of all kinds *except* on mortgages. Almost immediately the boom in “home equity” loans got going and what had been a great source of savings for many became a piggy bank. Now many avoided the temptation but many did not. My own bank was running TV ads encouraging home equity loans to pay for vacations.
We should consider that many trends are the results of incentives/disincentives that have been unintentionally baked into our system. So instead of making all interest deductible or none of it deductible, we allow only home mortgage interest to qualify. We should not be surprised when in addition to encouraging home ownership mortgages are used in ways that may not be the most prudent. The law of unintended consequences is inviolable.