Two parents shared their story recently on an online platform of promising to match whatever their son saved to help him buy a car and ultimately regretting their decision.
Financially Savvy
When their son turned 16 and received his license, his parents allowed him to use a used car from a relative. The son had saved around $5k at that time, and his parents promised to match whatever he had saved up until graduation.
They anticipated he might double that amount to $10k through part-time work, resulting in a reasonable $20k car. However, the son surprised them by accumulating $35k for a vehicle.
He claimed to have invested a little over $10k in smart stock options in April, resulting in a significant gain after taxes. Though his parents suspected luck played a significant role in his success, they were impressed by his financial savvy.
A Promise Kept
The son is insistent that his parents follow through with their promise to match his savings for a car, despite the amount exceeding their expectations. While it wouldn’t cause a significant financial burden due to the son earning a merit scholarship, they’re concerned about an 18-year-old driving around in a $70,000 vehicle.
Additionally, he wouldn’t be able to drive it to school until his sophomore year, and the insurance costs would be high. The parents are faced with a dilemma: break their promise and risk their son feeling resentful, or honor it and pay the money.
The father had a discussion with his spouse regarding the situation and is considering different options such as setting up a trust or investing in fixed income until the money can be used for medical school.
His son is reportedly very close to his girlfriend, and he has already informed her about the situation. She promised to talk to his son about it. The father empathizes with his son’s desire for a car like that at his age but believes that indulging in such a purchase would be a waste of money.
The Masses Weigh In
Other users on the platform seemed to be on the father’s side in this situation.
“I can say that a 70K car with an 18 year old driver … you’ll be lucky to get insurance and even if you do it’ll be stupid high,” one person pointed out.
“50k of that would be SO MUCH better off put in savings for his future. Buying a 70k car in cash is such an incredibly stupid idea,” another person suggested.
“It’s incredibly irresponsible to use all his savings on a car. Even at 18, a $20k car is more than enough.
Keep your word and match his savings (since you can afford to do so), but don’t put it towards a car. Put it in high-interest savings account for him as emergency/house savings for the future (or look into various low-risk investments).
He might be peeved about it now, but I guarantee he’d be grateful for that after he graduates college. Most 18-year-olds don’t understand financial responsibility.
At 18, if I had that kind of money, I probably would have been an idiot and bought some fancy car. I’m 24 now and understand a lot more about financial responsibility. I’d rather get a used $15,000 car and have extra money to grow my assets,” another person added.