Parked in Portland

Dear Gabby,

I’ve worked hard this year and saved some serious money. It’s not a fortune or anything, but for me, it’s a lot! When I told my parents how much I saved this year they were thrilled – because they think I’m saving to make a nest egg. But really I’m saving to buy a new Mini Cooper. I still live at home and can use the family cars when they’re available, but sometimes they’re not. I have my heart set on this new car, but the catch is I need my parents to co-sign for the car loan, then I could easily afford the car with my wages. I’m totally afraid to ask. Should I?
Parked in Portland

Make level paths for your feet and take only ways that are firm. Proverbs 4:26

Well, Parked, sounds like you’ve gone and got yourself what is known in grownup circles as a life goal. Life goals do not fall into the same category as buying a pet rock or an iPhone. Life goals are some big needy, living, breathing babies that require lots of TLC, commitment and attention. They are very fragile and can’t be turned off when you become bored with them. Ultimately, they make us better people in the long run because they require hard work to achieve and maintain.

You think you got it in you to care for this goal long after you’ve driven your baby off of the car lot? Yes, you say? If you’re responsible enough to hold down a full-time job and save money, Gabby thinks you might actually have the stuff to do this. But what about the road block – the little thing called a “co-signer.”

OK, so you’re set on a Mini Cooper. But wait! What if you discover the dealer has some really nice used Mini Coopers on the lot that they’d be very willing to bargain on? Just about the only thing you’re missing out on in a used car is the new car smell. And many used cars come with luxury features that you’d normally never be able to afford. But if you don’t have enough to pay for that pre-owned buggy in full, you’ll still need to finance. And often, terms for financing used cars are less attractive than for financing new cars. Surprisingly, it is sometimes the better deal to buy new. But if not, do you think, if your parents could afford it, that they would consider playing banker and loaning you the difference at a competitive interest rate? If not, what makes you think they would they be willing to co-sign on a loan for a new car? Is your relationship even up to these options? Could it withstand the stress of these new dynamics? These are all things to consider before moving ahead with this tender goal.

As Proverbs reminds us, “Make level paths for your feet and take only ways that are firm.” That means look before you leap. Think before you speak. So, sit down with your parents. Tell them exactly what your goal is and how you hope to achieve it. Show them how much you make each week and how much of that you’re saving. Of the amount you’ve saved, make sure to reserve some for that nest egg they think you have been working on. Show them how a car payment and the upkeep (gas, parking, tolls, insurance, property taxes, oil changes, new tires and unexpected repairs) will impact your budget. Keep yourself open to their thoughts and feelings. Stay open and honest. If they decide not to join you on this adventure, then you will have to reset the deadline on this life goal. Maybe you can’t get there this year, but rather next year. Maybe next year you won’t need a co-signer. You would have longer employment history, better credit score and more money saved, making it easier to stand on your own feet financially.

Just in case, do the math and figure out how long it will take you to save to get to your goal entirely on your own. If you go into the conversation with your parents already knowing and accepting the worst case scenario, you’ll be better prepared to handle their “no,” or fully appreciative of their “yes.” The point being, Parked, if you prepare yourself well, you will encounter fewer pot holes and a smoother ride overall.

Safe travels, Gabby.

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