Car woes

[cowberry]

Ok so DD is nearly 20 so not really a teen anymore but still at home and on apprenticeship (c£20k pa). She pays £200 pcm rent to me and step dad

When she passed her test a year ago she was given my old car with a year's insurance. Perfectly serviceable and good for probably another 5 years. It is however not a sexy car. On that we can all agree but it's also black so not terribly offensive.

Since then we keep having the same argument. She wants a merc (I have one, I'm 46 and earn significantly more). She wants a merc on finance at 300pm plus at least £150'pm insurance.!this would swallow around a third of her net income.

Myself and DSD are dead against this. Completely unnecessary and will cost a fortune. I want her to be off seeing the world and doing fun stuff not paying thousands of pounds in finance. She will not listen.

WIBU to say if she can afford to pay that much for a car then it's unfair on us to subsidise her living accommodation and actually if she wants to make these grown up choices then she pays for everything like an adult. Going rate for a house share round here is c £600 pcm.

I've pointed out that post apprenticeship she wants to go to university for 2 years which will limit her earnings significantly whilst studying and she will still have to pay finance. She just says she'll stay st home and commute.

I cannot and will not foot the finance billl for her should it go tits up

What would you do?

yeah that would be unfair that's coercing her into making the decision that you want her to make and putting your wants 'i want her to travel and see the world' over what she wants

The sense of self entitlement of younger people amazes me. Gone (sadly) are the days when you bought what you could afford, or saved up for something. Everyone wants it now and is happy to put it on credit.

On a £20k PA salary, she would take home circa £1,400 PM. She’s happy on that salary to blow £450 PM on a car (32%). What about fuel, road tax, maintenance. I also drive a Mercedes and have just paid £1k for a service. Everyone they run a diagnostic it costs £100! Has she thought how she will afford those costs?

How is she going to pay the finance (and running costs) while at University and not earning. Totally ridiculous. Does she expect you to subsidise her while she lives at home?

IMO she needs to start living within her means before the I want I want I want and spending gets out of control.

Yes, that’s really unfair. You decided what you thought was a fair rent so now she’s free to do what she wants with the rest of her money. She might not want to see the world. You can’t force her to do what you want her to do.

When DS1 was 20 he had his first BMW. He paid for it outright, it was up to him what he did the money that he earned. He’s bought two more since. The only input we have is DH goes with him to make sure the cars are mechanically sound.

Tbh I think it's really shit of you to consider charging her more to live at home because you don't agree with her choice of how she spends her money. So what if you think she would be off seeing the world. She obviously doesn't want to and would rather choose a nice car. So fair enough she is living at home very cheaply, but at 20 years old you have no right to dictate how she spends her money. If you were happy for her to pay £200 before then you should be happy with it still.

The reason she's on such cheap rent is because she's meant to be saving for uni. That was the plan. She's now considering a 4 year PCP contract which is in my view a terrible financial commitment. Should I underwrite her whilst she does this?

Seeing the world is an example of what she could be doing - and something she's talked about herself.

If she saved up half or even a quarter of the cash I'd be happier but she's fixated on having a new car which is entirely unnecessary

but again that's you policing what she's doing with her money, you don't agree with her choices and you can't punish her by grounding her or taking her phone away so your looking to punish her a different way

If you are still supporting them financially then yes, absolutely you have a say. Maybe they should move out to a house share to understand how much it actually costs to live?

Are they expecting your support when they go to university?

And FTR I agree with you, that's an insane amount of money for a car just because the current one doesn't fit their image.

I would let her make her own decisions

Simarish situation with my da ugh, although she doesn't pay rent.

Just bought a car on finance, rather than wait to get one much cheaper through salary sacrifice (new electric fiat 500, £170/mo including all insurance breakdown and servicing, given her insurance alone is £200 now). She's also been on 4 foreign holidays in 12 months.

I think it's completely reasonable to have a conversation about paying a fair share of living costs, own mobile contract, Netflix etc..

I would leave her to it whilst making it very clear that I won't be subsidised anything for her when she doesn't have the cash to go out or go on holiday etc.

This is a very bad idea. One more conversation. I think you should tell her the rent was low based ok the premis of saving. Tell her the costs of the car over 4 years. If she insists tell her you are worried she get into financial difficulty but you can't stop her. But you won't help her later. She'll have to fall herself!

It’s great she is chatting to you about this. Personally, I see your job here is not to decide how she spends her money, but to help her navigate the world of debt and sound financial choices. I’d sit her down and explain how the finance in this case works and see if there is a compromise for a different car where she might actually own the asset after 4 years. She will be spending £14,400 servicing debt plus £7200 insuring that debt. Add in 4 x services, tyres, 1 x MOT and when she is 24 and wonders why she has no deposit for a flat, here’s why. It all seems very easy when you are 20 but thinking with your heart not your head - your job is to gently suggest an alternative that may be better for a £20k salary. It’s great she has ambition, but PCPs are designed to keep you rolled up into contracts with the same brand and you are effectively kicking the financial can down the road as in reality you are taking ownership of something you cannot actually afford. This is why PCPs were invented - to facilitate the sale of more expensive cars to more customers. And her circumstances may well be different in 4 years time. Without a GFV (Guaranteed future value) she is liable between the value of the Car in 4 years time (condition and mileage dependent) and the PCP final ‘balloon’ payment which may be more than the car is worth. A GFV deal is usually more expensive but she can walk away if there is a shortfall. Usually the attractive rates are on a mileage that is below the average mileage. She also needs GAP insurance as a serious accident of the car being written off leaves her with no car and the debt (this happened to my friend’s son at the same age with an Audi and she had been his guarantor). She also needs to consider what happens if she is made redundant. Maybe if she can show you she has a year’s worth of payments and insurance ring-fenced you might feel better about the situation?

I hate this PCP trend of driving round in a car you could never buy outright and then handing it back every three years. DD is still driving the same old banger we bought her at 19, six years later. She saved for a deposit instead and now the old banger is parked outside her own house. Ok we live in a cheaper area, but her mortgage is what you’re daughter wants to spend on a car. Scary.

I did this 22 years ago it absolutely fucked my finances as I was living beyond my means and I spent my early-mid 20s accumulating £35k of debt and then had to pay it all off by having no life for a few years, my dad later helped to bail me out by buying me a cheap car with running costs within my means but I'd love to give 21 year old me a talking to.

The car she has gets her from A to B
The expensive car will get her from A to B

It's all about image though and trying to impress strangers out on the road

I'm with you op on this. The facts are, that if she were having to live independently she would not be able to afford it!
She has a car, it works, who cares what it looks like. I can't stand the trend of instant material gratification. Get your shiny new toy today and worry about how you (or your parents) pay it off tomorrow, so long as the Instagram likes keep coming in who cares.