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Student loans and car payment - Combining the two
skybox
Registered User regular
Registered User regular
Basically, I will be moving from Dallas to Columbia, Mo in August, and will essentially be living off student loans until I complete my undergraduate work. I will also be transferring to the UPS hub to work part time, so whatever money I do make (probably less than 1k monthly) will most likely just be applied back to the principle.
Now, here's the situation. I feel I'm in dire need of a new car. I currently drive a '93 Subaru Impreza that just hit 240k miles. It's worth noting that I did replace the engine about 50k or so ago, but that's still a lot of miles on everything else in the car. Since then, I have basically replaced every part of the suspension and control, and there is virtually no part of this vehicle that I have no taken apart in one way or another. Well, now it's time to replace the transmission! There's $1,000 I don't have.
Anyway, a co-worker recently suggested I visit www.driveacleanmachine.org to see about getting a voucher for trading in my car. If you don't want to check out the site, the gist is that there is a program for folks like me in and around the Dallas/Austin area that can trade in their car if it's more than 10 years old and get about $3k to be applied towards a new car as long as it's an '05 or newer. I can get $3,500 if I wanted to buy an '07 hybrid or better, but that's probably out of my price range.
Anyway, my question is this: is this a viable option for me? I'm sure someone, somewhere has payed for a car and lived off student loans at some point in their life. Are you this person? How did you do it? Any suggestions for me? I feel certain that, at this rate, I will be pouring more money into my Impreza just to keep it running than what I would with a car payment and insurance combined. Do you guys feel the same way? Am I completely crazy? Right now, my gut tells me to set an absolute price ceiling of about $14.5k. What bothers me the most is that, if by some crazy circumstance, I am not able to depend on my student loans to pay for everything each month (tuition, school expenses, rent (around $300), utilities, phone, car, insurance, gas, etc.) I won't be able to pay for it off my UPS income alone. I would certainly seek another job during such case, but I'm still left with an uneasy feeling in my stomach. It's a huge step and isn't foolproof, so I guess that's to be expected. However, I feel it's a step in the right direction.
Any thoughts are much appreciated, as always!
Now, here's the situation. I feel I'm in dire need of a new car. I currently drive a '93 Subaru Impreza that just hit 240k miles. It's worth noting that I did replace the engine about 50k or so ago, but that's still a lot of miles on everything else in the car. Since then, I have basically replaced every part of the suspension and control, and there is virtually no part of this vehicle that I have no taken apart in one way or another. Well, now it's time to replace the transmission! There's $1,000 I don't have.
Anyway, a co-worker recently suggested I visit www.driveacleanmachine.org to see about getting a voucher for trading in my car. If you don't want to check out the site, the gist is that there is a program for folks like me in and around the Dallas/Austin area that can trade in their car if it's more than 10 years old and get about $3k to be applied towards a new car as long as it's an '05 or newer. I can get $3,500 if I wanted to buy an '07 hybrid or better, but that's probably out of my price range.
Anyway, my question is this: is this a viable option for me? I'm sure someone, somewhere has payed for a car and lived off student loans at some point in their life. Are you this person? How did you do it? Any suggestions for me? I feel certain that, at this rate, I will be pouring more money into my Impreza just to keep it running than what I would with a car payment and insurance combined. Do you guys feel the same way? Am I completely crazy? Right now, my gut tells me to set an absolute price ceiling of about $14.5k. What bothers me the most is that, if by some crazy circumstance, I am not able to depend on my student loans to pay for everything each month (tuition, school expenses, rent (around $300), utilities, phone, car, insurance, gas, etc.) I won't be able to pay for it off my UPS income alone. I would certainly seek another job during such case, but I'm still left with an uneasy feeling in my stomach. It's a huge step and isn't foolproof, so I guess that's to be expected. However, I feel it's a step in the right direction.
Any thoughts are much appreciated, as always!
skybox on
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There are so many considerations in your specific situation: are your student loans subsidized; do your student loans plus your expected part time income give you sufficient monies to make car/insurance/student_loan payments and have enough for incidental expenses and living expenses and books; what's going to give if you cannot bring in as much as you think income-wise; if the transmission gets replaced, will the car be good to go for a few more years or do you foresee additional major work to be done; if you fixed the transmission would you net more if you sold it outright rather than trade it in to this program.
I hate to say it, but if you're racking up student loan debt, it's probably not a great time to undertake auto debt as well. At first blush it seems like a financially risky thing to do. Replacing your tranny would be like 3-4 small car payments, perhaps fewer when you start factoring in the increased insurance expense. Is that pricing for a new tranny? Perhaps look into a remanufactured one. And you say you don't have $1K for the tranny, that also says you don't have enough for a new car don't you think?
Are you a good saver? Can you save the equivalent of the increased expenses from your current income sources and not spend it, if you can for a few months, maybe you can swing this.
As far as would my car be good after I replace the tranny, I couldn't say for sure. Maybe. Maybe not. As I said, other than the engine and what I've replaced on the suspension, everything on that car has over 240k miles on it. The $1,000 is roughly the cost of what it would take for me to get a rebuilt one, including freight. Probably have to tack on a couple of hundred to get a friend of mine help install it. I should also probably replace the clutch while I'm in there. Basically, me doing this provides no assurance that 1.) the transmission will work properly for several years and 2.) that someone else just as huge won't do the same while I'm in Columbia and have little income of my own. That's mostly why something with a warranty sounds so appealing.
I'll bet you that the first list is going to be way longer than the second list. Generally, people get sick and tired of fixing their cars right around when they've replaced everything on them.
If you have a car in mind for yours, you should think about trading it in. If you don't (and somehow, I don't think you're going to find an '05 or newer car for less than $5000), you should seriously consider just fixing yours up.