Moral Dilemma (Loaning money you can afford to loan)

So I have a neighbor that I’ve been letting use my old car since I was stationed in Saudi Arabia in 2009. I’ve been back for a year now, and the registration needs renewed, and I will just give her the car (2003 Kia Spectra).

she, however, can’t register a car because of money owed to the DMV, and when a car is sold (even for $0) it requires an inspection which it can’t pass.

She wants me to keep the registration in my name, which I won’t do. So now she wants a loan from me to purchase a new car and she will make payments to me on the loan for a year.

I am just a neighbor, not family or close friend or anything, and my family is adamantly against loaning any money, stating “you’ve done enough by letting her use the car for 5 years”

However, a small loan of $1000 or so won’t really hurt me in any way.

There are a lot of other circumstances that I don’t want to list, for fear that I am listing them just to get the answer I want.

I guess the bottom line is, should I help someone I can afford to help if they are less better off than me, regardless of the circumstances?

I hope this is coherent, I’ve had a couple of beers.

why can’t/won’t you keep it registered in your name?

Because I am responsible for what happens with a car registered in my name. Parking ticket? Comes to me. Speed Camera ticket? Comes to me. She gets in an accident that is her fault, the other driver can sue her AND the owner of the car, which is me.

ok, yeah, that’s what i thought but wasn’t that the same situation for the past 5 years?

i also think you have done a lot to help her already? question, how much would it take to repair this car to make it pass inspection?

yes, i have done a lot to help her. Fixing the car to pass inspection would be more than the car is worth.

oh ok

does she have a job? in terms of paying you back… could you transfer the title to her parents?

no, it’s an adult woman, I think older than me. She’s has a job.

ok well, i think you should give her the loan unless the reasons you didn’t list are substantial to make a loan a bad idea. most people would tell you otherwise but you seem like a helpful person to me. not many people are like that, not to this degree. I am, you are, most people aren’t. if it really won’t hurt you financially i would give the loan. if it is a significant problem to make the loan for any reason you have already done enough to help.

I presume that your overseas duty status had placed you into a category that exempted your car from requiring yearly re-registration.

I wonder if you could offer some clarification on this, though:

Doesn’t this suggest that she would also need a loan to pay off her arrears to the DMV that are unrelated to her use of your car?

Here’s the (a) thing: for all intents and purposes, the phrase “Loaning money you can afford to loan” is indistinguishable from the phrase “Giving away money you can afford to give away.”

In the circumstances, perhaps the best course of action is for you to donate the car to a place that accepts vehicle donations, accept whatever tax deduction value they give you, and “loan” that amount to your neighbor. If she pays it back, great. If not, at least you get a tax deduction out of it, along with the knowledge that you did something really nice for a casual acquaintance, with no expectation of recompense (which it turns out you did even if she DOES repay the loan).

Even if the cost of making it pass inspection (which I’m guessing is probably just a big pile of wear and tear items right?) is maybe slightly more than the car is worth on paper, that’s still going to be a much better option than buying another unknown cheap-ass car. Unless there’s something grievously wrong with it you haven’t mentioned.

The other thing is that (again, barring some undisclosed grievous problem) your car is undoubtedly worth something to someone and I’d bet it’s well in excess of $1000. Why not tell her to take your car, sell it and use the proceeds to buy whatever she thinks is going to work better.

The reason why most people say it’s not a good idea to lend money to friends or acquaintances is that even if you really honestly don’t care about getting paid back, owing someone money can still really become a sore point. If you want to help her out and you can afford to lose the money, just make it a gift. Maybe she’ll pay you back, but make it clear you don’t want her to feel obligated.

Let me ask you this: How would you feel about giving her a $1000, no-strings-attached gift?

The thing is you are never going to see that $1000 again. If you make it a loan, there will be hard feelings between you. You will get ticked at her for not making payments, she will avoid you and resent you for “pressuring” her to pay you back even if you are a perfect gentleman about it. (She will feel guilt even if you don’t say anything.)

She is already in debt. Not just broke, but in debt. That’s negative money. And what about when the car needs an oil change, new tires, new brakes, a new water pump, and so on? Where’s that money going to come from?

I have no problem with your charitable impulses. If there is some reason you think she is deserving of a helping hand and you can afford it, go ahead and do it. But making it a loan is a bad idea for everybody. If someday 20 years from now she gets back on her feet and decides to pay you back, that will be a happy surprise for everybody.

Now, a special request to the Ladies of Dope: Stop reading now and go on to the next response.

Just between us, is she cute? Do you kinda hope you’re going to be her knight in shining armor and she’s going to fall for you? Don’t let your little head do the thinking. And there’s no way she’s going to like you if you pressure her to repay the loan. And I don’t think you’re going to buy her affection. And, anyway, long term you don’t want the sort of woman whose affection you need to buy. Use your big head. If she were the guy next door would she be worth spending $1000 on?

If she can’t register a car, how will she register a new car?

Well, for some reason, just giving someone $1000 seems too much. Maybe I am self-deluding myself into calling it a loan. The thing is, I don’t want to be responsible for the car, nor do I want to be responsible for keeping track of a loan, or responsible for anything having to do with the car actually. I’d like to just get rid of it.

LOL, no it is an older lady that is my neighbor, not anyone I would want to fall for me.

I’m not sure. That’s a good question that I’ll ask tomorrow. Thanks!

Out of curiosity, what kind of inspection are we talking about (safety? emissions?), and what work does the car need?

Whether or not I’d give her the loan depends on a lot more than what’s been revealed in the OP. It would have a lot more to do with what I knew about her as a person, her situation, and how she came to be in that situation. It’s pretty brazen to ask a neighbor who’s not even a friend for a loan, especially after neighbor gave her a car. My first thought is it seems on the surface she is an opportunist, and asking someone who she feels has a reasonable likelihood of agreeing, without having to subject herself to awkwardness and uncomfortable task of asking a relative or friend.

On the other hand you may be legitimately the only option she has and she agonized over asking for you for weeks before she had no choice but to swallow her pride.

I’d definitely not give a loan to the former, and would consider the latter, depending on more details about her situation

If you don’t know anything about it, quick test is to say you’re sorry but you don’t think you’ll be able to do it. If she gets pissy, or any attitude then forget it. If she reacts in a way that makes you respect her, then you can always reconsider.

Also at the risk of venturing further into the realm of moral ambiguity…

If she’s a generally okay driver the chances of her getting pulled over for expired tags are probably pretty low. The chances of her getting a ticket when it’s not her car (and if she acts suitably surprised) are also, well, maybe 50-50. Also, in most states expired registration isn’t a moving violation and I would venture the fine is a lot less than $1000.

Just saying that’s an option, particularly if it’s something where she could take the chance for a few months until you get back and can deal with it yourself.

Why doesn’t she just finance the car via a bank loan like everyone else does?

the problem with this is, registration to drive and title to the car are two separate things. If I don’t physically remove the plates, she can still drive with them on, and I am the person responsible for that.

Good question, I will also ask this tomorrow.