helping 21 yr old Son

Cash1,
My wonderful state of NJ has the highest insurance rates (surprise, surprise). You could have controlled the insurance costs by controlling the type of car you purchased.

To get a male, unmarried, and under 25 a sports car with a high theft record is asking for trouble.

You'd teach him a much better lesson about creditworthiness by trading in this car for a less expensive one. If you truly negotiated a great deal, then you don't have negative equity & should be able to do so. He's not entitled to drive his mama can afford, while he reneges on his obligations.

You said unfortunately you can't pay off his bills as well as yours. Actually, it's fortunate you can't. A 21 year old on the verge of manhoodshould be able to handle his business, unless he's still in college. If he is, let him drive what he can afford.

 

OT comment - sorry
All kids this age want the latest, jazziest car they can get. I talk to them every day - they call from the dealership, all ready to finance that baby and then they hear the insurance quote!! It's usually more than the car payment. Sometimes they stay on the phone for a long time, trying rates on different cars.

One of the greatest things you can do for your kids is let them get their driver's license as soon as they are eligible, and be tough on them about driving habits, so when they are ready to go out on their own, they have 3-4 years of driving experience, and a good record. Most companies will then "spin" the kids off your policy onto their own at much better rates (it still isn't cheap though).

My advice on the debt, he is still at a stage where this can be turned around. The advice to charge off and then fight is given to people who have no better choice. He has a better choice. And a chance to learn to take responsibility - these debts are not that bad, and it won't be hard for him to build a good credit history quickly.

And he has you!! Obviously you want to give him a good start in life, and that's wonderful!! You have a place that gives good credit advice. Tell him what we said.

The system is all screwed up, but he doesn't have to get into the mudhole - he's not there yet, and he doesn't have to go there

 

I'm sure the comments made were not intended to hurt you, but rather to be straight forward and to the point. You did ask. And, I must agree with them. As far as the car and insurance goes, sure, maybe the car payment is only $279. But because it is classified as a sports car, the insurance is sky high. Add the two together, and your son is living beyond his means. I agree with the others in that if he got rid of the car and thus had lower insurance payment, then that money could go to the debt. It's something to think about.

 

cash,

Guess what? I do fall into that category.

I'm 24. I'm a male. I'm unmarried. I drive a sports car. I have speeding tickets.

Yet my rate is just under $49 a month. Part of the reason my rate is so low is because I'm not driving a practically brand-new car that thiefs happen to like.

Like Breeze pointed out, kids who are "at that age" especially males are hot for these new tricked out sports cars. Case in point - Your son it driving a 2000 Integra. Yes, $279 is a reasonable car note payment, however combined with $350 a month for insurance, spending over $625 a month - just to drive your car - is hurting your sons' chances at taking care of his credit obligations.

BTW - I'm not trying to hurt your feelings by anything I said, I'm just giving you my personal opinion, just like everyone else who has commented on your thread has. I'm not sure what else to say. You posted a question asking what your son should do and you added into this thread info about how much he happens to pay for car insurance and his car note, and those combined, quite frankly, are holding your son back from having the available funds to pay off the c.c.'s and put some money aside.

We all make mistakes, no one is condoning you or your son. We're just pointing out other avenues you may want to explore.

 

I have to agree with the others who have said that it's time to make some hard decisions. I have a family member in sort of the same situation with a sports car. He would rather keep this beautiful, $550/month for 8 years, negative equity car (which the car was only $18,000 to begin with) than to trade it in for a better payment and get a more sensible car. He is also in financial trouble and much older than your son. He does not want to let go of his baby to save his financial situation. Tell your son that he is young and there will be another opportunity in the future to have that nice car. Sometimes you just have to bite the bullet. I wish that when I was in college, I had had someone willing to help me out of my early financial mess. Your son is very lucky to have you there in his corner. If I were your son, I would downgrade to a little toyota or something fuel efficient to get me back and forth to work, concentrate on my debt and start planning ahead so that the next time I get that sports car, I can handle the car payment, high insurance, and all.

This is not meant as an attack but many have and will attest to the fact that it's harder to get out of the hole than to prevent yourself from going in especially if you have options. Is your son willing to wait possibly 5 or more years to have those negative items come off of his credit report while being charged skyhigh interest rates for subprime credit cards, car loans, and being denied credit at every turn? Just something to think about.......

 

OK. You know what. You asked for opinions on a public message board. You didn't like the answers obviously. So what if you negotiated a great deal on the car. The fact remains, good deal or not, he can't afford it. My suggestion is next time if you think you won't like the answers, don't ask.

 

I have to comment (I know I shouldn't). The insurance that you and your son are paying is outrageous. I'm sorry to be so blunt. I am 24, my husband is 23. At 20 my husband purchased a brand new Mustang GT, supercharged, with all kinds of racy gadgets (tachs, pulleys, etc.) We weren't married yet. His insurance was $135 dollars a month with State Farm. I pay $65 dollars a month currently through Erie. I would truly suggest shopping for insurance quotes. That is absurd to pay $4200 a year for one car. The insurance company is laughing all the way to the bank. Now, I understand he is a 21 year old unmarried male, driving a sports car, but he can do better. Try Geico, Progressive, Nationwide, and Allstate (I believe they are in your area). They could probably give him more competitve pricing. I believe, $2000 a year for your son, no tickets, no accidents would be decent and save him over $2200 (which could go to paying off his bills).

If you son has truly learned the importance of credit and money he should repay his original creditors. If not, he will find out how nasty collection agencies, and the CRAs can truly be.

Just my $.02 and best of luck.

Dani

 

I was going to stay out of this - but can't. Here's MY kid's story and how I dealt with it. Age 16 - new Ford Probe. In a matter of 4 months, had an accident, rolled it three times. Of course, it was totalled. She desperatly wanted to replace it with a 2- door Honda Civic. Not a sports car, but VERY popular around here with the kids and thieves alike. How did I handle it, knowing that the insurance was going to go through the roof from the accident alone? I said NO. She ended up with a Chevy Caviler - 4 doors - black bumpers- no mags, no "wing," no sunroof, no fog lamps - just a very dependable car to get her to work so she could make the $189.00 payment and the~~ $139.00~~ insurance payment. She is still under 25 at this point, still wants that Civic. The Cav will be paid off in a year and a half, about the same time that she'll be getting out of college. Then she can go get whatever she wants, with a REAL job. I must add that she also defaulted on 2 CC's they were giving away at college, but now realizes that because of that, when she does go to get the almighty Civic, she's gonna have to come crawling to Mommy and Daddy for a co-sign.
I'm very sorry about your wife, but please don't do what my Dad did after my mother passeed away. My brother was quite young then, and my Dad spoiled him rotten, perhaps to make up for the absence of a Mom. Whatever he wanted, he got. When he went out on his own, he didn't have a clue as to what it meant to be responsible, and it took him 15 years of being a bum and looking for other people to take care of him before he got his life together. I know you mean well, but sometimes you've got to be cruel to be kind. Someday your son will thank you for it. I know, everyone's thinking, gee, Anna never posts more than a few words, but I just couldn't control myself on this one!
Anna

 

I understand about insurance rates in TX, I use to live in the dallas/ft worth area, actually in Arlington, Tx and prices for insurance for people under 25 are crazy. It does not matter what kind of car you drive, old or whatever. I was 16 over there when I got my license and wanted to drive. When my mother got a quote for there car which was a 1990 Bonneville this was in 1994 they were going to charge over $1000 for 6 months for just liablity to put me on their insurance to drive their car. My mom was like not going do it. Just drive w/o it. (Not recommending this). I ended up going over to other state for college, so I registered the car that I did eventally bought there my freshman year which was about 400 in liability for 6 months which was a big difference. I am now currently 23, If I went back to register my car there, these insurance companies would probaly try to charge me these crazy prices because I am still under 25. I refuse to pay this if I have had no tickets and no wrecks. It crazy

 

Cash1,

If your son only has 2 bills outstanding, the minimums on the 2 combined can't be much over $50. This isn't really a credit issue but, a budget issue. It's real simple. He needs more income and/or less spending. He's making a huge mistake early in life. If you finance a car and run credit card balances and, have no savings, you're broke-you just won't realize it until there is an emergency. I'd suggest he take a reduced course load during the summer term and pickup a parttime job. Split the money from that to say 2/3's debt reduction and, 1/3 savings. If he doesn't and goes ahead and defaults, you're going to be cosigning for him for a long time.

 

I was gonna stay out of this but I agree with LKH. Cash asked for opinions about whether or not his son should walk away from his debts just to keep the car (basically). I'm 29 so I still consider myself in his son's age bracket to a degree. My first thought:

Ok, fine. Insurance is high regardless of the car he drives. However, selling the car and buying a cheap, $3,000 car to get to/from where he needs to go allows him to pay his debts and save a little.

What do you mean by public transportation is "lacking"? Does that mean he can't get to his destinations using it or it's too much of a hassle. I'm not demeaning him but I ask because my sister claims the same thing when actually, what she means is that she doesn't like taking 2-3 buses to work. If doing that for a few months gets him outta debt then that's the route to take.

I also agree with another poster. This is more of a budgeting issue at this point. However, if he does not follow the advice given, it WILL become a credit issue.

One more observation - why is HE not here asking for advice. Why are you still doing the legwork for him? If he really cares about what's going on, he should be the one asking the advice.

 

tmitchell

you refered to a transportation system.

There is not much of one unless you live right in Dallas or Ft worth and I not even sure if that takes you everywhere around the city, if you live in the outer suburbs you don't have one. Especially places like Plano, Grapevine, Lewisville, Arlington, Grand Prarie, Hurst, Bedford and other areas that are real close to Dallas.

 

I gave you my experience and so did a few others and you still kept with the notion of letting it charge off. The way your posts were, you were not open to anything other than charging it off. So, why ask?

At any rate, I still keep with my original post, don't let it charge off.

 

I saw my name, but this is my first time responding to this thread...lol. At any rate...I agree with the other poster in that I would get a second or even a third job to pay these off. If he is in college, and he gets student loans, often times he can get a bit over for expenses, etc. He could use this to pay down his current debt. I normally wouldn't recommend anything like this, but student loans have a low interest rate and with luck, he will graduate to a better paying job than what he has right now.

On the insurance topic...I agree he needs a car and insurance (or lack thereof) is not an option. I almost bought a new car about three months ago (yeah...the Kia I was looking at). Insurance ran almost as much as the car payment at three different agencies and was the main reason (other than the interest they wanted me to pay) that I did not buy the car.

Anyway...my opinion is that these bills need to be paid off and he will learn a lesson from it. It will seem easy to him to just let them go and not pay, but if he has to work to pay them off, he is less likely to get into the situations many of us did early in life.


L

 

Zip code?

Cash, what zip code are you in, and what model Integra is it? I have an insurance quote generator here that I wanna play with...

RM

 

Re: Zip code?

One of the problems you have is that you got a good deal on a LEASE car. The insurance on a LEASE car is double what it would be on a PURCHASED car because of the higher liability limits required in a lease.

 

Re: Zip code?

Not necessarily. I quoted myself insurance with 100/300 BI and the overall premium went up by something like 5%. I went back a quoted myself with the legal minimum and my overall quote went down by about 5-10%. I've determined that there really isn't much to be saved by lowering BI coverage.

The big money saver is to drive a old heap without comp and collision.

RM