Advice: Daughter buying first car in grad school

[Travis Bickle]

Not sure if this fits in this forum or somewhere else - mods feel free to move or delete if needed.

My youngest daughter graduates in May, and in August will be moving to Oklahoma for grad school for 3 years. She has an older car, but we’re a little worried about reliability so she’s thinking of buying something new. This will be her first car under her name, so we will help out with the buying process but she will have to pay for it.

We are trying to decide if:

1 - buy the car in PA and register at our home address but she keeps it in OK. (Which would require she bring it back once/year to inspect and register).

2 - buy the car in PA, but then have her register it in OK once the original registration in PA is getting ready to expire (next summer).

3 - buy the car in OK after she moves and have her register it there.

We will of course look at insurance prices for the different situations but figured it couldn’t hurt to ask the super-smart people here for any thoughts/experiences or other options.

Thanks in advance.

 

[Dash man]

Not sure if this fits in this forum or somewhere else - mods feel free to move or delete if needed.

My youngest daughter graduates in May, and in August will be moving to Oklahoma for grad school for 3 years. She has an older car, but we’re a little worried about reliability so she’s thinking of buying something new. This will be her first car under her name, so we will help out with the buying process but she will have to pay for it.

We are trying to decide if:

1 - buy the car in PA and register at our home address but she keeps it in OK. (Which would require she bring it back once/year to inspect and register).

2 - buy the car in PA, but then have her register it in OK once the original registration in PA is getting ready to expire (next summer).

3 - buy the car in OK after she moves and have her register it there.

We will of course look at insurance prices for the different situations but figured it couldn’t hurt to ask the super-smart people here for any thoughts/experiences or other options.

Thanks in advance.

PA car registration is cheap. Check what the costs are in Oklahoma. Some states charge a hefty tax on car registration.

 

[aaronc879]

Google says both Registration and insurance are less expensive in PA than in OK. Of course if she is only going back to PA to get an inspection once a year then the savings all go to pay for the trip back to PA every year.

 

[Sunset]

I vaguely recall people have an issue of having a car registered in 1 state, but used all the time in another.
Insurance coverage may not cover the car.

How old is her existing car , and what type ?

 

[Dash man]

I vaguely recall people have an issue of having a car registered in 1 state, but used all the time in another.
Insurance coverage may not cover the car.

Students may not have an issue with this if she keeps her residency in PA, but it sure is a good question to ask the insurance company!

 

[OldShooter]

I think that what you teach her about buying cars is the most important aspect of this proposed transaction. It will probably stick with her for life. What I would teach:

A brand new showroom car is among the worst investments that people make. An older car will not depreciate like a new one and will be a far better investment.

Absent exceptional circumstances, borrowing money to buy a depreciating asset is also a bad idea. (Leasing is just a complicated and expensive way to borrow money.) In this new-graduate case a small bridge loan from the bank of mom and dad is probably OK. Among other things it will teach her how much fun it is to shovel money out month after month and get nothing back. Ideally this will stimulate saving that enables her to buy her next car for cash.

I actually did borrow right out of grad school to buy a car. Gawd, I hated those payments. Never borrowed for a car again and we are far richer because of that.

 

[Car-Guy]

I think that what you teach her about buying cars is the most important aspect of this proposed transaction. It will probably stick with her for life. What I would teach:

A brand new showroom car is among the worst investments that people make. An older car will not depreciate like a new one and will be a far better investment.

Well usually I'd agree that's pretty much true... However, over the past two years things have been strange. Example, I've traded 3 times for brand new higher end cars (2 of them actually off the dealerships showroom floor) drove them a total of 60+k miles and then spent less than 3k between them on all the trade-ins (usually for the same or higher value cars). These cars have actually appreciated considerably. Not sure it will stay that way much longer but that's been that way recently.

 

[HarveyS]

there's also an option 4: Buy it in PA, get a temp tag, and register it in OK when she gets there.

 

[OldShooter]

Well usually I'd agree that's pretty much true... However, over the past two years things have been strange. Example, I've traded 3 times for brand new higher end cars (2 of them actually off the dealerships showroom floor) drove them a total of 60+k miles and then spent less than 3k between them on all the trade-ins (usually for the same or higher value cars). These cars have actually appreciated considerably. Not sure it will stay that way much longer but that's been recently.

I agree it's been strange. For that reason, recent wheeling and dealing history is a very bad thing to base a lifetime strategy on. If something can't go on forever, then you can be sure it won't.

 

[captain3d]

55 years old. Never spent more than $10k on a car. Reliability has never been an issue.

Only buy new if you are happy to supply people like me with bargains.

New cars are just silly purchases unless they fit in your luxury pocket money budget eg if you have million + net worth

 

[OldShooter]

... New cars are just silly purchases unless they fit in your luxury pocket money budget eg if you have million + net worth

Well, the way we look at it is that we have our good net worth because we don't do stupid things like buying brand new cars.

Lately, because we have become more prosperous, we have been buying last-model-year but unsold cars and certified used cars from dealers. We still eat some depreciation but avoid the big pill.

 

[Ian S]

Well, we keep our cars typically for 12-15 years and maintain them well so we aren't fazed by initial depreciation. One thing though in the past few years is the proliferation of new safety devices. I think this is an advantage to buying new. We just bought a brand new Camry and I believe we are far better protected in it than the old one we are getting rid of. Comfort and convenience are better too. This approach has served us well and fortunately, we can easily afford it. If automotive technology continues to advance as quickly, I could see us buying a bit more frequently.

 

[mf15]

My sons truck is registered in Pa he works down the shore in NJ during the summer.
Its a pain to come back for inspection.
Oldmike

 

[still_working]

We faced a similar question with our daughter (albeit a couple years younger than yours but still away at an out-of-state college) and had a lengthy discussion with our insurance agent before making our decision.

His position was:

• If she was at-fault in an accident, she will probably get sued
• Knowing that she was a student, the other party would assume she was receiving financial support and go after the source of that support (us)
• If the car was titled in her name and insured elsewhere, our umbrella policy would not protect us as our insurance company has no 'duty to defend'

Our daughter's college is in a state that allows full time students to maintain their out-of-state registration, so we registered the car in our home state and kept her on our insurance for the reasons noted above. It's a little less convenient and a little more expensive but we'd rather do that than bear the additional risk.

Good luck with your decision, and congrats to your daughter on grad school!

 

[PaunchyPirate]

Decades ago, when I was finishing grad school in Buffalo, NY and getting ready to start my career College Park, MD, I was able to purchase my car in New York State without registering it there. I was issued an “in-transit” certificate that was put on the vehicle in the rear window. It was an official document of some sort. Once I got the car to MD, I registered it pretty quickly (like a week or so). I think I technically had 30 days to register it. Before I got it registered, I was pulled over in DC (probably because the officer didn’t see a license plate). Once I explained and showed paperwork and/or he got close enough to see the window document, he sent me on my way. I remember he admitted that he didn’t know there was such a thing.

You might ask the dealer if this is still an option.

 

[Walt34]

Also check that OK laws let a full time student keep the car registered in another state. Not all of them do. Since she will essentially be a full time resident in OK state law may require that the car be registered and insured in that state.

 

[FI_RElater]

ages ago...and I do mean ages ago (multi-decade)... when I was in grad school that state required grad students to register in their state (undergrads might not have?),*** but that's way before the change to allow coverage of various insurance to students up to (26??) of today (and even that might only apply to undergrad and not graduate students)... so check your state of schooling. Insurance companies rate their rates by where it's used... I doubt they'd want to give coverage for less than they would normally rate, and failure to change registration might nullify insurance coverage depending upon company.

***in part that may have been due to grad students normally being employees (TA or RA) in many disciplines, don't know how they interpreted other areas (MBA, law, etc)... that wasn't my area of study.

 

[OddGuy]

I'd approach this the way I would any adult life decision - don't overthink it, and don't worry about "bundling". Right now, she's a PA resident with a PA driver's license, correct? Just buy the car in PA and register/insure it to match her license.

When she starts grad school, she'll be able to determine if she actually like grad school, and if she actually likes Oklahoma. If she decided to put down roots there, she can change her license, etc.

 

[sengsational]

When I moved to NC, the cops drove around the parking lot at my workplace. When they kept seeing the out of state plate, they walked in and asked the receptionist who's car it was. The cop said he'd start writing tickets unless I registered. I was going wait until the other plate was near expired, but I had moved and NC was my permanent residence. If the OP's D isn't going to make OK the permanent residence, then keeping PA plate should be legit. The insurance is a separate and should be the same, irrespective of the plate because you need to tell them where you park it and how many miles you drive it.

 

[Out of Steam]

When I moved to NC, the cops drove around the parking lot at my workplace. When they kept seeing the out of state plate, they walked in and asked the receptionist who's car it was. The cop said he'd start writing tickets unless I registered.

Because of collection of local property taxes, Virginia has traditionally been aggressive about this.