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Student Loan for a new car?
Tucanwarrior13
Registered User regular
Registered User regular
I have a problem. It basically runs down to I need money for college, and I need a new car. My need for a new car isn't "I'm sick of this one, I want another one." I really do need a new car. I currently drive a haggard '91 jetta that has been in two front on collisions. I have a job that pays well enough for me to pay for college tuition once a month. Though leaves no room for me to buy a car, and pay tuition. I really don't want to take out a student loan, but I really need a new car. What should I do? Is it a good idea to take out a student loan? If I were to get a new-ish car it would be my parents G6 that I would have them buy after the lease, and take over the payments of about 325 dollars a month. My tuition payments are 360 dollars a month. What should I do?
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You're best bet is to get a cheaper used car with a lower payment than try to tack it on your school loans. You might be able to get it on a school loan but there is absolutely no point when you'd probably end up paying more than if you had a straight auto loan. That said, sit down with your local bank and see what kind of auto loan they can give you.
A functional car doesn't need to be pretty, sounds like you just want a pretty car and yours runs fine.
No the car is really pretty much done for. I end up working on it nearly every single weekend. The radiator is shot, the struts, and shocks on all four tires are pretty much done for. It's becoming more work to keep on the road than what it is worth.
No I'm living at home.
Fair enough. Most 2002 models are probably in the ballpark of $5000, that'd probably be your best bet. I'd hate to see you tack on another $20,000 on a school loan and have a $600 monthly payment for 10 years.
Check out www.autotrader.com or something local. You'll be able to pick up early 2000ish models for about $1-2K. IMO, your best bet too.
Ya I've been looking at 2002-2004 Jetta's with Salvage Titles. I like them, and with the salvage title they're pretty cheap.
I'm trying to avoid that too. I think a car loan would be best, and just make the payments on that.
It's not that my ONLY option is the G6. It's really more of an ideal car, time, place situation. It's there. I could get it cheaper since it would stay in the family, and there would be no taxes. I like the car. It gets good gas mileage, and is super reliable. It's just been an overall great car.
Unfortunately no. I live in area of Michigan where everything is at least 2-15 miles away from where you are. I live 18 miles from my work, and 30 miles away from school. I drive at least 80-90 miles a day. So both free public transportation, and the beater car are out of the question. I drive a beater now, and driving that far forces me to work on it alot more than i like to. It sounds crass, but I need a newer model car. Just the strain alone of so much freeway driving is terrible for it. Add in the condition of many of Michigan's roads, and you're looking at the worlds best auto-blender.
I'm not using a student loan to buy a car. I'm using a student loan to pay for school which would allow me to make monthly payments on a car.
When you're worried about needing money to pay tuition and pay for a car, getting a car with a $325/month payment sounds like a bad idea.
You should have no problems finding a decent, early-2000s used car for under $200/month. I would stay away from anything with a salvage title unless you're going to be insanely thorough in checking it out (i.e. getting it inspected by a professional mechanic who knows its history) before buying.
The smart thing to do is see what kind of student loan you can get, and compare it to what kind of auto loan you can get.
And, be careful with Carmax... they sometimes sell bad shit and depending on the local management, they may tell you to get bent. They're hard to get any recourse through at that point without getting out the lawyer stick.
Do NOT do that.
Ask your parents for help or go for a cheaper used car, honestly.
Which is a monumentally stupid thing given how banks are going belly up and barely have any moan to lend people.
How do banks going belly up and barely having any money to lend people affect him wanting a loan for a car, I'm missing something. It's the bank's responsibility to make sure they lend out money they have, not his. His rates should be good because it will be a student loan... I'm missing something.
I agree with the other people saying that $350 is too big of a car payment and to get a car that isn't as nice. GungHo's recommendation about a certified used car sounds particularly good.
However, the OP should really consider a cheap used car over taking over his parents' leased car.
Any institution that will finance a car will also require full/comprehensive insurance on it... did you count that into the equation? you're probably paying almost nothing for basic liability insurance right now, compared to what a comprehensive policy on a new-ish car will cost for a <25yr old.
It's usually expressed in $rape.
exactly... it seems that the OP is basically calculating all of his income to this new car payment, but he forgot the other associated costs...
also, OP, remember that many new cars have stupidly expensive maintenance requirements at regular intervals... $30K/60K/90K, etc.... and many are required to keep your warranty
Browsing classifieds and craiglists, I found a 2003 Ford Focus with a rebuilt title for 3 grand which is one of the betters deals I seen. What exactly does rebuilt mean? Should I stay clear of such titles?
First you should look up a history report on the car. It's most likely been in some kind of fairly major accident or experienced some other extensive damage (flooding, fire, etc). There's going to be a much higher chance of problems coming up with this car than there would be on a similar car with a clear title, which is why they're selling it for probably several thousand less than one with a clean title.
In general, I'd recommend staying away from cars with a salvage/rebuilt title.
Well, you could consider buying from the south if the price difference for transport and taxes make up the difference on the car. It wouldn't have the rust from the salt, so you wouldn't have to worry about being one of the Flinstones for a couple of years.
I have this conversation with the new hires all the time. They get out of college, see what we're willing to pay them, and then start thinking about a Beamer/Lexus and a custom home. They fail to consider all the shit that goes around owning a Beamer and a custom home like insurance, maintenance, and other things you steamroll into when trying to keep up with the Joneses.
I don't try to tell the youngins how to live their life, but while you can get loans and such to pay for a car and house, it gets harder to do so for the maintenance on a car and a house, unless you're going to put yourself in hoc with the credit card companies. Living with the spectre of a Sword of Debtocles over your head for your young adult life ain't a whole lot of fun, especially when you're also having to bust your ass to succeed at school/build a career.
A rebuilt/salvaged vehicle is a vehicle that has experienced a significant decline in value (70% market value) due to damage. Damage could be from flooding, fire, a wreck. It could be damage to the frame, axles, engine, drivetrain, or just to the body-on-frame. You have no way of knowing what happened to that vehicle unless you can view the incident report. Buying/driving around such a car implies a large amount of faith in the body shop that repaired the car. I don't know of more than one body shop that I'd trust to have remembered to put every single bolt where it was supposed to go and used new, factory-fitted parts onto a vehicle that may convey myself, my dog, and my girlfriend at speeds up to 80 MPH on a busy highway, and the only reason I trust that shop is because I've seen the work they do and am good friends with the shop steward, and I know that guy will send a vehicle to specialists if he is concerned about the amout of damage to a car. He's not cheap or fast, but the shit's done right the first time and it's done well.
How much faith do you have in a complete stranger wearing a name tag "Otis" who you've never met in your life? You don't even know if the mechanic who did the rebuild washes his hands after he pees or in what state his shop may be in, much less if he knows how to rebuild a car, because it's likely you're either getting a car bought and resold out of a salvage auction or some owner who is too scared to drive the thing after his insurance screwed him on getting the car totaled.
edit: I even parked them outside almost the entire time I owned them.
My parents have agreed to pay the insurance for me. So that concern is really gone.
If you are going to be taking out a loan to buy a car, a student loan would be the best kind to get. As Thanatos already said compare an auto loan to a student loan and see which is better.
If you can get a subsidized student loan with decent interest, definitely not a bad idea for the car. Be mindful though of how many months it will take you to pay both the car and the student loan off.
And most of those Hondas you recommend with 75-100k miles on them? Right around ten years old.
Living in Central New York all my life I've never had a problem with salt in newer model cars. Older than 2000? Yeah, it absolutely raped them with corrosion. I haven't seen a problem with any of the newer model cars I've owned even getting past 100K, not because of salt anyways.
Trust me, I've seen a lot of fucking salt for 8 months out of the year.