‘I made a big mistake’ Mom finances $27,000 car for her adult daughter and wonders if she should just get a HELOC to pay it off
When Rachel called into The Ramsey Show, she didn’t waste time sugarcoating. She admitted she had made a big mistake. See, last September, she financed a $27,000 car for her adult daughter. The idea was that her daughter would build her credit, refinance, and move the car loan into her own name within a year. That never happened.
Nearly twelve months later, Rachel is still on the hook for the loan, the registration, and the insurance. To add insult to injury, her daughter racked up toll violations along the way.
Rachel told Dave Ramsey that she was so overwhelmed she was thinking of taking out a home equity line of credit or even dipping into retirement funds just to get rid of the car loan
She is 61, preparing to draw Social Security, and said she felt desperate to make the problem disappear.
Ramsey didn’t flinch. He told her the car needed to go. He explained that her daughter, who is a single mother of three, doesn’t need a $27,000 vehicle. In fact, keeping it only deepens the financial mess for both of them.
Ramsey said Rachel’s attempt to help had backfired. Instead of lifting her daughter up, she had weighed her down with a payment she couldn’t handle.
The advice was direct: Rachel should sell the car, even if it means being underwater
If the car fetches $24,000, for example, Rachel could cover the $3,000 gap with a small loan and then use the rest to buy her daughter a modest $5,000 used car.
Ramsey stressed that many single parents drive affordable vehicles and that providing something beyond their means only sets up more hardship.
This scenario underscores Ramsey’s long-standing stance on cars: don’t finance them
Buy only what you need, not what you want but can’t afford.
Cars lose value fast, and payments drain households already stretched thin. He often says that a car loan sold as a blessing usually turns into a curse.
Rachel admitted she felt guilty and emotional about the situation, but Dave Ramsey urged her to stop rationalizing and make the hard call. Selling the car would hurt in the short term, but it would prevent years of struggle.
