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173 Past Due – Our Daughter Needs A Car, We Can’t Get A Loan

by Derek Sisterhen on September 16, 2011


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Past Due: Radio 173 – Our Daughter Needs A Car, We Can’t Get A Loan

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Robert and his wife Patricia are reaping a harvest of, admittedly, poorly sown financial decisions. They have a college-age daughter who is splitting the family vehicle with Patricia to get to and from classes, then to and from her part-time job. The family needs a car in the worst way, but no one is qualifying for a car loan.

In his submission, Robert acknowledged that they’ve been late on mortgage payments in the past, and are trying to clean up their finances, but now they feel limited with this incredibly inconvenient transportation situation.

Today we discussed:

1) How the pressure of inconvenience often drives us to rushed, unwise financial decisions. We must assess the true cost of paying interest on a used car (and likely subprime interest at that) in the context of the hassle-factor of sharing a vehicle.

2) The importance of Robert and Patricia openly confronting their financial situation for their children to see. It’s time for them to lead their kids – two generations of healthy money managers hang in the balance.

3) How sometimes the best course of action isn’t the most obvious. Robert’s daughter has already saved $3,000 toward the purchase of a vehicle and has the potential to save more than her parents.

This show exposed a lot of the systemic financial issues we’re seeing in American households with regularity: paycheck-to-paycheck living, financially unprepared children, the perpetuation of the “Sandwich Generation”, and knee-jerk decision-making in financial discomfort.

If you have a specific question, I’d be happy to answer it and further cultivate the wisdom of the Past Due Radio masses. The experiences of our listener base provide plenty of insight we all can learn from; don’t hesitate to ask – I’m happy to help!

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  • Kenny

    Have you looked into living car-free? We have been successful with this. No registration, insurance, maintenance, etc. Look into the transit options in the area, ride a bike to everything within 5 miles of home or less. It is so easy once you get in the swing and so satisfying and freeing. 

  • Kenny

    she is driving a car with a $500 income? really? there is the 1st problem. No one should even consider this. It will OWN you. School should be easy to walk, bike, or bus to enough. IF there is ANY chance of getting something, it should be a $1000 car and keep a few grand away for incidentals. Or, a MAX $3000 car (get a mid 90’s 100k mile Corolla….they are just beginning to walk). 

  • Justin Lukasavige

    I love this, Kenny. We downsized to one car about 6 months ago and I’m in love. Our truck is parked in the garage (4 wheel drive for CO winters) and my wife just walked into town for a coffee.

  • Derek Sisterhen

    Good thoughts here, Kenny!  Thanks for weighing in (and for advocating a car-free lifestyle).  The family in this show lived outside of walking distance to the college the daughter was attending, so their options were to secure the vehicle or try public transportation.  The challenge with the public transportation for the daughter was the potential for bus schedules to interfere with her part-time job.  Given the financial instability of the parents, she wouldn’t want to jeopardize that income.

    Regardless, though, outside of buying an inexpensive vehicle for her, this family was going to have to get used to sharing the other car.

    It sounds like you’ve figured out long ago, Kenny, that spending too much on cars is a great way to limit your financial potential.  Thanks for weighing in and for your courage to buck the typical American norm!

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