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Original poster

Should I get a loan for my dd

118 replies

notthisagainforest · 18/03/2023 15:35

My daughter is 22 and has a good job. She lives at home and has had an accident in her car that wasn't her fault. The car is a write off. She wants to buy an Audi a1 She has applied for a ten thousand loan and the interest rates are very high. I could get a low interest loan with my bank and give her the money. She would pay me each month for 4 years. I don't earn a high salary and I don't have any debts atall. Would you do this for your daughter or would you let them take the loan out in their name at a higher rate ? She hasn't asked me but I'm thinking of offering but I don't know if this is the right thing to do. Please advise.

OP posts:
Hollyhocksandlarkspur · 18/03/2023 17:53

No from me too, partly because I’ve found DC can resent the paying back bit after a while, whereas if loan is from bank it won’t affect your relationship.

To dissuade her I recommend adding up what all the interest payments will come to over four years and then demonstrating how much she would save herself if instead she saved and used her bonus to pay upfront in a year or so instead. eg it will actually cost you X overall. Can be a wakeup call. It seems crazy for her to earn such a big salary with few overheads and not save for a house deposit.

1Wanda1 · 18/03/2023 18:01

@notthisagainforest "I'm just asking for advice I'm not looking for insults."

I didn't insult you. The title of your thread is "Should I get a loan for DD"? My answer (and everyone else's, it seems) is "no, that is a ridiculous idea and will not teach DD the right lesson about money management".

Lovelynames123 · 18/03/2023 18:03

Against the grain, I would, and my parents have done this for me in the past. 10k for a car when you're earning 35k and have minimal outgoings is not outrageous. And at 22 I can understand wanting a nice car, I did before I had kids and less disposable income.

Stellaris22 · 18/03/2023 18:04

What is it about the Audi she's so set on? Is it simply the fact it's an Audi?

I can't imagine she'll change her mind, but would she be willing to sit down and look at alternatives? Could you convince her to speak to a financial advisor?

QuinnofHearts · 18/03/2023 18:05

An Audi A1 at 22? Get a grip mum

thaegumathteth · 18/03/2023 18:06

Never in a million years would I do this. It encourages her to spend outwith her means, that's a recipe for disaster.

GlassBunion · 18/03/2023 18:08

So she basically cannot afford an Audi A1 then.

She needs a lesson in living according to means.

Iloveacurry · 18/03/2023 18:08

She’s 22. What she wants isn’t necessary. She should be getting a cheaper car.

I drive a Skoda. I would love an Audi. But I can’t afford it.

Hbh17 · 18/03/2023 18:08

Absolutely not. She buys what she can afford, even if that's just an old banger. Just because she "wants" an Audi doesn't mean she should have one, ffs!

neitherofthem · 18/03/2023 18:11

notthisagainforest · 18/03/2023 15:45

Ok thanks. She doesn't need an Audi a1 she wants one She is getting 3.500 for her write off and she doesn't want a run around she says she wants a nice car

It's a 'No' from me then. She needs to think again about what is both practical and affordable.

You cut your coat according to your cloth.

Original poster
notthisagainforest · 18/03/2023 18:12

Hbh17 · 18/03/2023 18:08

Absolutely not. She buys what she can afford, even if that's just an old banger. Just because she "wants" an Audi doesn't mean she should have one, ffs!

No I agree she shouldn't have one but she is getting one anyway and can afford the 250 a month. I was wondering if I should save her money on interest as she's doing it anyway

OP posts:
Original poster
notthisagainforest · 18/03/2023 18:14

GlassBunion · 18/03/2023 18:08

So she basically cannot afford an Audi A1 then.

She needs a lesson in living according to means.

She can afford the monthly repayments she can't afford to buy it upfront

OP posts:
Riverlee · 18/03/2023 18:15

Out of curiosity, does she pay you any rent, or contribute to the household at all. Eg cooking meals, cleaning etc. Or does she have any savings? Saving towards house deposit, rainy day fund etc It does sound like she needs a serious discussion on money management, and planning for the future.

Original poster
notthisagainforest · 18/03/2023 18:18

Riverlee · 18/03/2023 18:15

Out of curiosity, does she pay you any rent, or contribute to the household at all. Eg cooking meals, cleaning etc. Or does she have any savings? Saving towards house deposit, rainy day fund etc It does sound like she needs a serious discussion on money management, and planning for the future.

Yes I do agree. She does save some each month and she pays me rent to live here. She only seems to live in the now and not think too far ahead.

OP posts:
Magenta65 · 18/03/2023 18:19

Let her sort it herself. She earns £35k so can afford repayments, if she loses her job etc it’s on her to pay for it. People are not really realising on here £10k at 22 on a car is pretty normal, £10k car is around £150-£200 on finance a month (I’ve been looking myself) earning £35k she can more than cover it. If she’s helping with bills, looking to save for her future etc then she can sort the car herself. She seems responsible and mor than old enough to sort it herself. Plus if she’s working then she needs something reliable

Inject · 18/03/2023 18:20

Don't do it. She could lose her job. She's only 22 - she is probably on a low wage. We are entering a recession. No one needs a £10k car that is financed with a loan. She can get a £2k one and save for the more expensive one. You and your daughter have no financial sense to even consider this.

Magenta65 · 18/03/2023 18:20

People on MN seem to avoid any kind of credit, but most people can’t. Not everyone has money to buy a car outright. Perhaps she needs to go car shopping and see what her monthly expenses can aftord

blacksax · 18/03/2023 18:29

notthisagainforest · 18/03/2023 16:25

The deposit will be in write off money. She hasn't got any savings but is getting a large bonus in March

Show quote history

Let me get this straight - she is 22, lives at home, earns £35k a year and she has no savings??

I know she contributes to household bills (which she jolly well ought to be if she's earning that much), but how come she doesn't have any savings? What is she spending her money on?

PaulRuddDoesntAge · 18/03/2023 18:29

She has done very well to get to such a good salary plus bonus at her age, hats off to her and you.

I wouldn’t get the loan for her, but I would help her shop around to make sure she’s getting the best rate.

I would also be encouraging her to save a little more and also use her annual(?) bonuses to overpay on the loan where possible.

If she’s hell bent on the car then I don’t think you’ll be able to stop her but you should continue to guide her on finances more generally. Once you get into the habit of spending all you earn and borrowing above that, it can be hard to stop. High earners can end up in mountains of debt.

strawberryicecreamice · 18/03/2023 18:32

What about a PCP?

Original poster
notthisagainforest · 18/03/2023 18:33

PaulRuddDoesntAge · 18/03/2023 18:29

She has done very well to get to such a good salary plus bonus at her age, hats off to her and you.

I wouldn’t get the loan for her, but I would help her shop around to make sure she’s getting the best rate.

I would also be encouraging her to save a little more and also use her annual(?) bonuses to overpay on the loan where possible.

If she’s hell bent on the car then I don’t think you’ll be able to stop her but you should continue to guide her on finances more generally. Once you get into the habit of spending all you earn and borrowing above that, it can be hard to stop. High earners can end up in mountains of debt.

Thank you that's very good advice

OP posts:
Original poster
notthisagainforest · 18/03/2023 18:34

strawberryicecreamice · 18/03/2023 18:32

What about a PCP?

She wants to own the car at the end of the term. Isn't pcp just like renting a car I'm not sure ?

OP posts:
category12 · 18/03/2023 18:39

She's only 22 so I'd kind of expect her to live in the now.

I wouldn't take out a loan for her though. It's her mistake to make, but you putting yourself in to debt to smooth her way to getting this expensive car she wants, is a bad idea.

If it does go tits up later on, you'll have the capacity to step in and help if necessary.

fridaytwattery · 18/03/2023 18:39

"No I really haven't been able to spoil her. I do not earn anything like she does. She has worked hard from 16 to get to the job she has now. She has had Christmas and birthday money but that is all. I know she is not making a good choice. I just didn't know if I should get the loan to save her money on interest but the vast majority here are saying no"

Then I wonder why you would choose to put yourself in debt @notthisagainforest - just to save her some money on interest, when it's obvious she has enough disposable income to afford luxuries?

PaulRuddDoesntAge · 18/03/2023 18:43

Also make sure she arranges the direct debit to come out on payday and drill into her that she must ensure she pays it before anything else, or she could ruin her credit rating.

With that much income, she might as well learn to borrow responsibly, even if the loan is in reality completely unnecessary.