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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:
tribpot · 18/03/2023 18:55

How was the previous car financed?

I think I would be encouraging a savings habit by telling her you're planning to sell up in X years in order to downsize and free up some capital. She's got herself a very good financial start in life with a good salary on unrealistically low outgoings, she needs to make the most of this to be saving. A gentle hint that you're not obliged to house her might be in order.

Polarbearyfairy · 18/03/2023 19:02

For me this is simple: never borrow money one someone else's behalf, no matter who they are.

unsync · 18/03/2023 19:07

That would be a no from me too. If she wants it, she can pay for it, high interest rates or not.

Original poster
notthisagainforest · 18/03/2023 19:23

tribpot · 18/03/2023 18:55

How was the previous car financed?

I think I would be encouraging a savings habit by telling her you're planning to sell up in X years in order to downsize and free up some capital. She's got herself a very good financial start in life with a good salary on unrealistically low outgoings, she needs to make the most of this to be saving. A gentle hint that you're not obliged to house her might be in order.

She saved up for her first car. I'm happy to have her at home I don't want to ask her to move out but yes I have said that she should be saving up with a view to moving in the future. She saves some money then she books a holiday and spends it.

OP posts:
Original poster
notthisagainforest · 18/03/2023 19:25

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?

Because I suppose as a mum I don't want her to pay more interest than she needs to. I dont think I would be putting myself In debt as such because she would have to set up a standing order my account

OP posts:
BadgerCive · 18/03/2023 19:25

My issue with this is a 22 year old getting into debt for an extravagant car when she could afford to buy one outright that would be perfectly reasonable. As a matter of principle I wouldn't be facilitating her getting into debt for a luxury item. I've always been taught you save up to buy what you want and if you can't buy it outright you can't afford it. (Not including mortgages, but that's usually a sensible investment whereas a car would be a depreciating asset.)

For me this isn't about the loan, it's about values. Don't encourage such a young person into debt for no sensible reason it's pure madness.

Original poster
notthisagainforest · 18/03/2023 19:27

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.

Ok thank you I think this is best

OP posts:
EggBlanket · 18/03/2023 19:33

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

She’s old enough to know that what she wants and what she can have are not the same thing.

Absolutely ridiculous to expect to have £10k Audi when you’re 22 and don’t have a good enough salary to buy one.

Original poster
notthisagainforest · 18/03/2023 19:35

She can afford the monthly repayments on her salary

OP posts:
BadgerCive · 18/03/2023 19:38

Also the fact she has no savings and spends on hair lashes and nails is a huge red flag. On her salary she should have savings, plus the things she's spending her money on paint a picture of someone very superficial wanting to keep up with a certain image, and the car is reinforcing that.

Original poster
notthisagainforest · 18/03/2023 19:44

BadgerCive · 18/03/2023 19:38

Also the fact she has no savings and spends on hair lashes and nails is a huge red flag. On her salary she should have savings, plus the things she's spending her money on paint a picture of someone very superficial wanting to keep up with a certain image, and the car is reinforcing that.

Yes it is but she is young and that's what she wants to spend her money on so I can't stop her. She's enjoying her life and part of me thinks she may aswell enjoy it while she has no commitments

OP posts:
tribpot · 18/03/2023 19:47

I'm happy to have her at home I don't want to ask her to move out
Right, but I'm not suggesting you ask her to move out, I'm suggesting you remind her that she can't live at home forever. Putting even a vague deadline on it (like saying you're thinking you might want to downsize in about 5 years) might be a nudge to start saving.

PickledPurplePickle · 18/03/2023 19:53

I wouldn’t but help her shop around for a better deal if possible

fridaytwattery · 18/03/2023 19:56

notthisagainforest · 18/03/2023 19:25

Because I suppose as a mum I don't want her to pay more interest than she needs to. I dont think I would be putting myself In debt as such because she would have to set up a standing order my account

Show quote history

It's a debt until it is paid in full and that will fall to you as it's in your name.

My opinion is you need to let your DD experience the paying of high interest to fund her lifestyle choices and what that means. If you 'save' her from this, then she isn't getting the life lessons she needs to learn as she grows older. Support her in finding a good deal as another PP says, but let her make her choices and take the responsibility of them. Then with decisions that really matter, perhaps when she has a family and home of her own, she'll have this experience to reflect on, (ie whether the extra interest was worth paying for the enjoyment/prestige).

babyfrenchie · 18/03/2023 20:18

If I was in a position to help my child like that I would go for it! :)

Stomacharmeleon · 18/03/2023 21:05

@babyfrenchie me too.

TomatoSandwiches · 18/03/2023 21:28

babyfrenchie · 18/03/2023 20:18

If I was in a position to help my child like that I would go for it! :)

It would one thing to give her daughter 10k if she had it laying around but un reasonable to take a loan out and put herself in debt for her daughter that earns more don't you think?

MichaelFinneganbeginagain · 18/03/2023 21:31

So is the £10k loan in addition to the £3.5k payout for the write-off? So, an A1 for closer to £15k, or would it be £10k + insurance?

Whichever way you slice it, I think it’s madness!

A1 seems to be a crazy thing at the moment - my DD in Y2 of uni has her sights on an A1, despite not having even passed her test!

At least 4 of her friends (all under 20) have one as they upgraded from Polo a year after getting their license. I’ll not be funding an A1 for my DD, neither will I be enabling a loan. Like OP’s situation, my DD seems to prioritise holidays, nails and lashes over savings.

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