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Dear Penny: I helped my daughter buy a car and now she won’t make payments

Under the circumstances spelled out here, the advice columnist says Mom has few desirable options.

Dear Penny,

Three years ago, my daughter had no job, no car and no credit, but she had a brand-new college degree. I helped her purchase a car so she could conduct her job search.

I agreed to make the first three monthly payments of $343 each. I set up autopay to bill my bank account. But I put the car title in her name. I didn't want to be liable if there was an accident.

Well, duh. That was a big mistake. After three months, even though she was working, she asked for an extension, which I granted. She continued asking for extensions citing myriad excuses: Her cats got sick and she had big veterinary bills, her rent increased, she had to replace a cell phone, etc.

Three years later (on a five-year loan), she's never taken over payments.

She eventually stopped bothering to make excuses and called me selfish and a "nag.” She felt entitled to the car because "you have a BMW and enjoy a life of leisure.” (I'm retired after 43 years as an elementary school teacher.)

I was never asking for reimbursement, just that my daughter would be responsible for payments going forward. She knew three years ago and knows now that the car was NOT a gift.

The car dealership finance department said they couldn't even talk to me because the title isn’t in my name. The bank said if I stopped payments on the bills, the car would be repossessed. I’ve already paid more than $17,000 for the car.

Now my daughter and I no longer speak. Meanwhile, she lives beyond her means. She is a big disappointment to me. My other two children transitioned to adulthood and financial independence quite easily.

As I age, I’m incurring more medical expenses. I need to rein in my spending.

What can I do to extricate myself from this situation?

P.

Dear P.,

Your daughter can either do the mature, adult thing and make the payments she agreed to. Or she can keep driving her car for free knowing Mom is legally on the hook for the loan.

Unfortunately, the choice is hers. I wish I had a better answer for you.

If you want to get rid of this loan, your options are to pay it off or let the car be repossessed, which will destroy your credit.

As long as you and your daughter aren’t on speaking terms, your chances of getting her to contribute one cent toward helping you pay off this car are approximately 0%.

So I think you should reach out to her — but leave the loan out of the conversation at first. (Other things to avoid include “You’re a disappointment” and any mentions of how much better her siblings are at adulting.)

But eventually, you two need to have some honest talks about your financial situations. You may find that your perceptions about the other’s finances aren’t exactly accurate.

Assuming your daughter actually said the words “you have a BMW and enjoy a life of leisure:” Did you counter by telling her that your medical expenses are rising and you need to scale back?

If your daughter thinks of you as a rich lady in a Beamer, it’s much easier for her to dismiss what she owes you. After all, it’s way less scary to say “nope, can’t pay” to your mom than, say, your landlord. But if she knew you were struggling, maybe she’d make these car payments a higher priority.

Also consider that your daughter’s a relatively recent grad. Chances are she’s not earning much. Neither of you knew what her salary would be or whether she could afford the car payments when you signed this loan. And while rent increases or unexpected expenses may sound like excuses, they can break your budget when you don’t earn a lot.

None of this excuses your daughter, of course. She made a promise that she should make good on.

But until you break this stalemate, you have a car payment and you’re estranged from your daughter. It’s a lose-lose for you.

If you can start communicating, maybe you can work out a compromise. If your daughter really couldn’t afford $343 a month but could commit to $100 or $150, would that be acceptable? It would ease your burden a bit, while also allowing her to accept some responsibility.

There are no guarantees you’ll get anything out of your daughter. But your odds of success are a lot better if you can approach this as a financial problem, rather than evidence of your daughter’s shortcomings.

Robin Hartill is a senior editor at The Penny Hoarder and the voice behind Dear Penny. Send your questions about money disputes to AskPenny@thepennyhoarder.com.

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