USNA " Car " Loan Money?????

[THS]

There must have been counseling/advising sessions available - DS was talking about the loan during Christmas break his 3/c year and continued discussing the pros and cons until he received it. We advised him against buying a car since Uber and Lyft are available. I believe his focus was on taking advantage of the perks and privileges that woukd be available during his 2/c and 1/c years.

 

[cb7893]

I understand. Everyone wants a great car. But, like houses they are money pits.

Would suggest looking into ASSUMING and existing lease. The upfront capital costs have already been paid. The seller often times wants out of the lease and will buy their way out of it.

DS got one upon graduation/commissioning May 2015 in the upper Midwest. Seller paid him an incentive to take the lease over. Ford leasing was involved in the transfer. The seller even paid the transfer fee. DS drove the vehicle all summer, reported to BOLC in Sept, deployed overseas in February 2016. Last act in US was turning the keys over to a Ford dealer in South Carolina. There was no early exit fee since he was being deployed overseas. His net cost was about $150/mo for a vehicle with a factory warranty. Granted, the Ford Focus looked kind of silly parked next to the shine new F150's and Mustangs.

When he returned to the US, early Spring 2017, he was transferred to sunny Fla. This time, he took over a lease on a family-size Mercedes SUV from a physician whose wife decided she no longer liked it. Same drill. Three months later he was deployed again and took the keys to the Mercedes dealership.

Fast forward to this past Thursday AM. He returned from deployment and on Friday paid cash for a 2010 Honda Civic with 60k miles.

Leases are in fact, a bad deal. However, in assuming one, what makes them a bad deal--the up-front capital/depreciation--has already been paid.

His wife and brother both drive cars with assumed leases. My next one will be for sure.

It is perfect for a nomadic military lifestyle. PM me for more details.

 

[Old Navy BGO]

Financial literacy begins at home, when kids get that first dime.

+1 -- of course, but its an ongoing learning experience, and launching a bunch of young officers into the world without formal training is irresponsible. These young officers will quickly be in the position of counseling even younger troops on financial matters, and all to many kids leave college with no concept of budgeting and money management.

 

[Stealth_81]

Son took his loan money and invested it. As far as a car, he drives a 2013 Camry hybrid that he got off a dealership lot after it was returned from a 12-month business lease. He got a 36 month zero-interest loan through Toyota Financial. He has put about 10,000 miles on it since he bought it because he has been deployed so much and is now in Korea. He bought a $600 Daewoo Magnus from another pilot who was leaving Korea at the time he arrived, and plans on selling it for the same amount to another pilot when he leaves. Think ahead before you put a bunch of money into a vehicle that is going to sit doing nothing much of the time.

Stealth_81

 

[cb7893]

He bought a $600 Daewoo Magnus from another pilot who was leaving Korea at the time he arrived, and plans on selling it for the same amount to another pilot when he leaves. Think ahead before you put a bunch of money into a vehicle that is going to sit doing nothing much of the time.

+1

I think that is my DS's plan as well. He expects to be OCONUS shortly after Christmas.

 

[jl123]

Financial literacy begins at home, when kids get that first dime.

+1 -- of course, but its an ongoing learning experience, and launching a bunch of young officers into the world without formal training is irresponsible. These young officers will quickly be in the position of counseling even younger troops on financial matters, and all to many kids leave college with no concept of budgeting and money management.

I once tried to teach a private to balance his checking account after he kept bouncing checks. He showed me his checkbook, but had no entries in the register for deposits or checks written, and no banks statements.

I asked him how he knew he had enough money in his account and he replied "I still have more checks."

 

[cb7893]

I asked him how he knew he had enough money in his account and he replied "I still have more checks."

So when was this Pvt. elected to Congress?

 

[laxer98]

He thought he was making progress on his spending habits when he told me he had found a club in DC that had a 1-drink minimum and not a 2-drink

Good to see that Midshipmen haven't changed that much...Still remember my roommate sitting down with a handful of Visa bills the week before Spring Break, adding up his remaining credit limit on various cards to figure out how much money he had to spend in Ft Lauderdale. He came back with a handful of maxed out cards. (His first job after leaving the Navy was as a "Financial Advisor" !)

On a more serious note, does USNA have some form of financial literacy program now ? I seem to recall that we had a handful of briefings late First Class year, trying to prepare us for the real world. That would probably be more effective earlier in the game, before the Midshipmen go out and do stupid things with the money they have.

For Plebes, Financial Literacy was the very first chapter for Professional Knowledge and we learned all about managing our money efficiently as well as aspects to Midshipman life such as the ACE loans, SGLI, SCRA, and more.

As an upperclassman there are several optional briefs during which outside professionals provide lessons and advice on managing money.