zzdcar
Home
/
Reviews
/
Buying
/
When Helping A Kid With A Car Purchase, Should We Finance To Build Their Credit?
When Helping A Kid With A Car Purchase, Should We Finance To Build Their Credit?-July 2024
2024-02-19 EST 22:09:29

Image for article titled When Helping A Kid With A Car Purchase, Should We Finance To Build Their Credit?

As Jalopnik’s resident car-buying expert and a professional car shopper, I get emails. Lots of emails. I’ve picked a few of your questions and will try to help out. This week we are discussing whether it is better to pay cash or finance a car for a kid, and trading two cars for one.

“We are helping our 19-year-old son with a car purchase. It’s a $17,000 car and he is contributing about half. We can certainly pay cash for the balance but since he is young with limited credit history we are wondering if getting him a loan would be a good way to build credit? However, we are worried that he either won’t qualify or only get a sky-high interest rate.”

There is a certain freedom in just paying cash and being done with the purchase, debt-free. However, since playing the credit game is a bit of a necessity when navigating the financial world, successfully managing a car loan is a good way to get started—though it’s not the only way to get started. You could have your son apply for the loan with you as the co-signers. That way he gets the benefit of the payments positively contributing to his score, and your credit scores mean that you would qualify for a reasonable APR. I would strongly suggest shopping these rates around as you do not want to be at the mercy of whatever the dealer offers yoeu.

Next up, what’s the best way to manage selling two cars and buying one?

“I have a 2004 Discovery 2 in pretty great shape, and a 2016 Mazda 6GT also in good condition. The dealership dropped off a 2019 cx-5 GT Premium today and I LOVE IT. But the monthly is gonna be higher than I wanna pay. They offered me 11,400 for the 6 on trade and I owe 15,382. I’m fine selling off both my current cars for the new CX-5. Should I private sell? What should I list the Rover for? It has a 2.5" lift, steel front bumper and like I said, is in great condition. I’ve heard of them going for around $10k. “

So it sounds like you are a bit underwater on the Mazda but I assume the Land Rover is paid off. I would suggest getting some other offers on the Mazda via Carvana, Vroom, and Carmax. They may give you something a little closer to your loan balance. As for listing the Discovery, I would suggest you review some comparable listings and then price it accordingly. Perhaps a Land Rover forum or even an auction site like Cars and Bids would get you a more targeted audience that would be willing to give you top dollar.

All that said, you have a reliable daily driver and a cool off-roader. You are entering a market where deals are minimal to non-existent yet you have two cars that you still enjoy. You also said that the payments on the Mazda were “too high.” I’m of the opinion that owning two cars is better than one especially if they each have their own specialty. Maybe the best play is to just keep what you have.

Got a car buying conundrum that you need some assistance with? Email me at [email protected]!

Comments
Welcome to zzdcar comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Buying
Someone Willingly Paid $16,000 For A Maserati Ghibli On Cars & Bids. Don’t Make The Same Mistake
Someone Willingly Paid $16,000 For A Maserati Ghibli On Cars & Bids. Don’t Make The Same Mistake
Let’s cut right to the chase: buying a is not a good idea unless you have deep enough pockets for the upkeep. For those not in the know, they’re sirens. They draw you in with their premium Italian image and sweet songs of and then go in for the...
Jul 6, 2025
Which One Of You Suckers Is Going To Pay Over $32,000 For A 25-Year-Old Toyota 4Runner
Which One Of You Suckers Is Going To Pay Over $32,000 For A 25-Year-Old Toyota 4Runner
The (and Tacoma) have a death grip on used values. It’s been this way for years. Go ahead, go try and buy any TRD trim that’s a couple of years old; it’ll cost you as much as a new one — not that you could buy a new one...
Jul 6, 2025
At $950, Would You Go All-In On This 1984 Plymouth Colt GTS Turbo Project?
At $950, Would You Go All-In On This 1984 Plymouth Colt GTS Turbo Project?
One of the calling cards of today’s Plymouth Colt is its “Twin Stick” overdrive gear change, which gives the car eight speeds going forward and two in reverse. Let’s see if this project car has anything else to offer. Just as Goldilocks discovered when appropriating Papa Bear’s lifestyle and...
Jul 6, 2025
At $18,500, Would You Lean Toward Buying This 2022 Ford Mustang?
At $18,500, Would You Lean Toward Buying This 2022 Ford Mustang?
Today’s Mustang is being sold by a towing yard, which means it’s probably a lien sale. Let’s see if this clean title convertible is priced to put a new buyer on the hook. The general consensus on last Friday’s was that it would be the perfect car for someone...
Jul 6, 2025
At $5,900, Is This 1984 Nissan 720 4X4 A Solid Deal?
At $5,900, Is This 1984 Nissan 720 4X4 A Solid Deal?
According to its seller, today’s Nissan 4X4 shows “pride of ownership.” Let’s see if it would take swallowing one’s pride to pay its asking price. Opinions were split on how well the design of yesterday’s has held up over the years. Some of you commented that the design still...
Jul 6, 2025
At $8,600, Would You Go Topless In This 1994 Cadillac Eldorado?
At $8,600, Would You Go Topless In This 1994 Cadillac Eldorado?
The seller of today’s Caddy claims they should be selling it at auction but says who’s got time for that? Let’s see if we have the time for this custom convertible at its non-auction price. Many of you agreed that the $950 asked for yesterday’s was “chump change.” Even...
Jul 6, 2025
Copyright 2023-2025 - www.zzdcar.com All Rights Reserved