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Evergreen6 · 05-16-2014, 01:28 AM

Here's what the good financial advice of me says (and I realize I'm probably the lone dissenter of the group): No, not a good idea. The kid is 19, highly mobile, in the military, the last thing he needs is debt and a car following him around. He can have a lot (and I mean a LOT) of fun with a used 4th gen or something else that's still relatively safe and is a thrill to build and/or beat on. He can pay cash for it, insure it for cheap or just for liability, and when the car's done, he can move on to another car that he pays cash for while he saves the rest. I have military friends that spent all their money while they were in the military. I also have friends who had some fun but save the rest. They're a lot farther ahead than their peers who spent it on new cars and fun toys.

I would never encourage anyone (ever) to build credit by taking out credit and paying interest. Building credit also happens with time and responsibility, i.e. taking out a credit card, using it for budgeted expenses, and then paying it off every month. Having the account open will build credit, and USAA will set him up pretty good when he wants to buy bigger and better things.

The other side of me says...$21k OTD isn't a bad deal for a 1LS, that's about what I paid for mine a few weeks ago. Sale price was just over $18,900 before tax, title, license. It's a safe car, it's halfway decent on mileage,

but,

It's just a gateway drug. He'll trade it in within a year or two and lose some good money by doing that. This advice is completely lost on most 19 y/o's, but save up and get what you really want when the time is right and you've got cash to pay for it. I only advise taking out a car loan if the payment is 10% or less of monthly gross pay, financed for no longer than 36 months, at the best interest rate available (good/excellent credit). Things can change real quick and the last thing you want to do is be upside down in a car when you need to get rid of it or can't afford it.

So no, I don't think it's a good idea. It's not the end of the world either, and i think I already know how this one plays out having been 19 once myself. He's looking at a brand new car and he's probably going to buy it. The future opportunity of saved money isn't as tangible or important as is having fun and probably finding a fun hobby, outlet, escape, from being in the military.

Good luck to him!

05-16-2014, 01:28 AM	#7
Evergreen6 Banned Drives: 2023 Camaro 1SS Join Date: Apr 2014 Location: United States Posts: 1,586	Here's what the good financial advice of me says (and I realize I'm probably the lone dissenter of the group): No, not a good idea. The kid is 19, highly mobile, in the military, the last thing he needs is debt and a car following him around. He can have a lot (and I mean a LOT) of fun with a used 4th gen or something else that's still relatively safe and is a thrill to build and/or beat on. He can pay cash for it, insure it for cheap or just for liability, and when the car's done, he can move on to another car that he pays cash for while he saves the rest. I have military friends that spent all their money while they were in the military. I also have friends who had some fun but save the rest. They're a lot farther ahead than their peers who spent it on new cars and fun toys. I would never encourage anyone (ever) to build credit by taking out credit and paying interest. Building credit also happens with time and responsibility, i.e. taking out a credit card, using it for budgeted expenses, and then paying it off every month. Having the account open will build credit, and USAA will set him up pretty good when he wants to buy bigger and better things. The other side of me says...$21k OTD isn't a bad deal for a 1LS, that's about what I paid for mine a few weeks ago. Sale price was just over $18,900 before tax, title, license. It's a safe car, it's halfway decent on mileage, but, It's just a gateway drug. He'll trade it in within a year or two and lose some good money by doing that. This advice is completely lost on most 19 y/o's, but save up and get what you really want when the time is right and you've got cash to pay for it. I only advise taking out a car loan if the payment is 10% or less of monthly gross pay, financed for no longer than 36 months, at the best interest rate available (good/excellent credit). Things can change real quick and the last thing you want to do is be upside down in a car when you need to get rid of it or can't afford it. So no, I don't think it's a good idea. It's not the end of the world either, and i think I already know how this one plays out having been 19 once myself. He's looking at a brand new car and he's probably going to buy it. The future opportunity of saved money isn't as tangible or important as is having fun and probably finding a fun hobby, outlet, escape, from being in the military. Good luck to him!