I'm finally considering getting a loan to buy a car that I enjoy driving and is reliable. Since I've got my license I've hopped around cheap Facebook beaters all for under two grand, which worked their Fair bit until they don't, paired with the fact none of them drive that well get good mileage or are reliable. And then maybe the selfish reason, but I don't feel cool driving it and that's a big factor for me. I'm 19, have pretty decent credit around 750 and live on my dad's property for a small 400 a month that I split with my girlfriend too. So excluding groceries and gas costs, I maybe have 250 outflow a month including my share of rent and a phone bill. All that being said, I was considering going through a used car dealership here, with a finance plan, or straight up financing a newer Toyota of sorts, quite truthfully I have no idea about any of this though. Any insight would be great, and I will answer questions to the best of my ability
19 Year Old, no rent, good credit, car loan?
byu/pacificsandwichboss inpersonalfinance
Posted by pacificsandwichboss
9 Comments
Why wouldn’t you just save up cash and buy a nicer car than what you have?
Your expenses seem pretty low, so you should be able to save a good amount pretty quickly.
1. What do you consider cool
2. How much do you make a month
3. How much money do you have for a down payment
Rates are high and you will buy more car then you need, like all of us.
Save the cash and then buy the best car for your money. Car payments drain you and the interest adds up.
One of the most important points of advice to live well is to avoid consumer debt as much as possible. Also at this point in your life things may radically change, college, or who knows. A car loan will limit your choices.
Cars are a liability not an asset!
Good luck
Can you put 20% down, have a payment under 10% of your monthly income, and pay off in 48 months?
If no to any of those you can’t afford it!
The car loan trap is America’s number one decider between being wealthy and middle class. I would suggest NEVER taking on a loan for a car. Just because everyone else seems to do it, does not mean it’s the right choice.
If your gut feeling tells you that this purchase with a loan is going to be a hard on your finances, most likely it will be the right feeling and you should listen to it. In the near future, if you are not able to pay off the principle consistently and only the interest, this is a trap that will hold you back for years to come. If I was 19 years old again, I would focus on working like crazy right now and figuring out how to plug into the new economy that is emerging because of AI. I would go all in and bet on myself. “Think and Grow Rich” by Napolean Hill is a good book and recommend reading it. Just my two cents.
The best advice you can get is don’t take advice from this place haha
Forget the car loan. Buy a cheap beater (actually cheap, both acquisition and operation, in other words don’t buy a cheap BMW), and save the money for something that won’t depreciate.
New cars are a RIP off, you can get a two year old car like new substantially less. SAVE as much money as you can cause life can change quickly and cash is ALWAYS helpful.