Car loan requirements (Chelsea)

TAOofGoldyShep

LOL...that was the long "give a lesson/answer a question with a question" answer...so I'll take that as a no, you did not work on your own junkers.

LMAO.  Good point.  Frankly, I don't recall any of my junkers requiring much work, but I am not a mechanic.  I used to do my own routine maintenance but beyond that, I recognize my own limitations.

Under those circumstances, I'm guessing any car dealer that would loan you the money would give you an insanely high interest rate. I would get the job first and then if you absolutely needed it, get a "temp" car that you plan on having for a year or two and drive that before buying a more expensive car.Don't you live in a good-sized city in southern Cal? Don't they have public transportation that you could use?? 

I would urge you to avoid getting any kind of loan right now. No jobs are 100% safe in this economy, but at your age I would guess that the jobs you would be applying for will be more susceptible than average to layoffs. You don't want to get a car loan and pay on the car for a year and then not be able to make payments and lose the car.

I suggest you get a job and open a savings account that is not connected to a ATM card. Estimate a monthly car payment, plus monthly portions of registration and insurance, and a month after you start your job, start depositing that amount into the account. You might want to toss a few extra bucks in every now and then for gas and oil changes. In a year you'll have money for a downpayment, it will look good to a loan officer, and you will be used to living without that money so you won't feel a pinch when you get the car and start making payments. When your car is paid off, keep putting money in that account for the next car.

As for new vs used: a "young" used car can be a good choice because you avoid depreciation, etc.  Plus, you made it sound like accidents are fairly common near you so a new car is NOT the way to go because if (God forbid) the car is totalled you can end up owing more than the insurance says it is worth.

 i dont think anyone has mentioned the fact that insurance is HIGH on new cars. even more so if you are a young person in a metropolitan area. i wouldnt be surprised if you had to come up with an additional $3-4K per year for insurance alone.

 i would definitely consult your insurance agent before buying anything, new or used, to get an estimate on what your insurance would be. that is a cost that you always have to consider.
 

probe1957

jjsmom06

Hell.. Billy the jerk has never even owned a new car and he is a very old man.   

That's not QUITE true, Shel.  Well, the old part is true, SA, but I have owned a couple of new cars.  However, at some point, I realized that buying new just NEVER makes financial sense.  NEVER.

Hmmmm... I think you lied to me before... I could have SWORN you said you have never owned a new car and I recall being shocked that a man at your advancing age and with your expendable income, has never owned new.  

Chelsea, something else to consider with any vehicle you are looking at whether old or new is car insurance rates. If you do decide to go new, it will be substantially higher.  But the type of car you get also makes a significant difference.  The strike against you is your age.. they love to sock those car insurance costs to you.  

jjsmom06

The strike against you is your age.. they love to sock those car insurance costs to you.  

This is so true. When you find a car make and model that you finally like and want, or even if you have a few in mind, before making any decisions call around to different insurance companies and ask them to give you a quote on the type of car so you can get an estimate of what you will be paying a month on insurance.  

jjsmom06

I recall being shocked that a man at your advancing age and with your expendable income, has never owned new.

It is precisely because of my LACK of expendable income that I don't buy new.  I am very poor, a fact, for which, I am sure you will slam me.

I don't get why everyone here is against new cars.  I am so not into buying used cars.  Other peoples germs and dirt and God only knows what else...EW!  I drove a used car in college, but as soon as I got a job when I graduated, I bought a new one.  Drove it for 7 years and now me and my husband have two new cars.  Yes folks, two new car payments.  But it's worth it to me and we plan to keep our Jeep for a long time.  Now, I don't think Chelsea is in the position to be getting a new car until she's gainfully employed.  And yes, here is Cali the insurance is a lot.  But no, we don't much have reliable public transportation.  And ew who wants to get on a bus with nasty people who may hurt you?   But I vote for getting a job at CVS (least ghetto) that you can walk to and save up and buy a decent but used car for a couple grand.  Then later you can get a new car.  Trust me I get it though, I went to Pepperdine for college and everyone had a BMW, one kid even had a ferrari and I had a 1981 Volvo with an 8-Track (this was in 1998), I hated it but for the time being it was what was feasible.  Not sure if you're doing the college thing, but once you graduate, lots of car companies have college grad programs.  Does anyone you know have a used car they would sell you that you could make payments on?  That's what my friends parents did for her in high school.  No real loan, but she had to make payments.  My parents took out small (under $4k) loans for my sisters cars, but I don't know if that's possible for you.  But CVS isn't a bad a place for a first outta the house job.   Good luck!

jenn52

I don't get why everyone here is against new cars. 

I don't think anyone here is against buying a new car IF you can afford it.  Most of us just don't want to see Chelsea jump in over her head, wind up with huge car payments w/high interest and high insurance rates, then wind up getting the car repossessed ... which is what happens if you can't make the payments. That can really put your credit rating in the toilet.  We got an excellent deal on my sons used car. It only had 700 miles on it because it was used by the dealer as a loaner for people having work done but it was still considered "used."

Joyce

jenn52

I don't get why everyone here is against new cars. 

Last year, we bought a 2004 Pontiac GTO.  The original sticker was in the glovebox.  According to that sticker, the new price was $35,000.  We bought it, 3 years old, with 18,000 miles on the clock, for $18,000.  The car had lost half its value, in 3 years and over very few miles.  THAT is why I don't buy new.  It has nothing to do with being able to afford it.  It just doesn't make economic sense.  I defy you to show me different.

jenn52

Other peoples germs and dirt and God only knows what else...EW! 

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probe1957

Last year, we bought a 2004 Pontiac GTO.  The original sticker was in the glovebox.  According to that sticker, the new price was $35,000.  We bought it, 3 years old, with 18,000 miles on the clock, for $18,000.  The car had lost half its value, in 3 years and over very few miles.  THAT is why I don't buy new.  It has nothing to do with being able to afford it.  It just doesn't make economic sense.  I defy you to show me different.

jenn52

Other peoples germs and dirt and God only knows what else...EW! 

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jenn52

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cyclefiend2000

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probe1957

Last year, we bought a 2004 Pontiac GTO.  The original sticker was in the glovebox.  According to that sticker, the new price was $35,000.  We bought it, 3 years old, with 18,000 miles on the clock, for $18,000.  The car had lost half its value, in 3 years and over very few miles.  THAT is why I don't buy new.  It has nothing to do with being able to afford it.  It just doesn't make economic sense.  I defy you to show me different.

While it is true that a vehicle depreciates more rapidly in the first three years than afterwards, it depends on the vehicle.  I bought my truck brand new in 2002 for $19,750.  I refinanced it in April 2007 to lower the interest rate, and it valued out at $14,450.  That's not too shabby for a 5 year old truck!

Liesje

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