I'll be 18 in about two weeks and I plan to get my license finalized towards the end of the month (So I won't need a parent to be there- (Longgg story)), I currently live in an apartment with my bf and one other roommate. Originally it was seven of us, but some crazy shit happened and now its just us three so rent is about 500$ a month each. I make about 13/hr with weekly paycheck of about 300$, so that leaves little money for me to save.
The good news, my bf and I will move in 3 months, where rent will be significantly less so I can start putting proper money aside. Additionally, I have a job opportunity that would nearly double my income, and I will be guaranteed more hours. The only downside is it will be a 20 minute drive compared to the five minutes it takes me to get to my current job, meaning I'll need a car. I considered a moped or some kind of bike for a bit, but with this new job, that's not really an option anymore
Either way, I would prefer an older car, I've been looking for a Honda CRV, or a toyota prius, both will be pretty great on gas and I'm not super worried about appearances, and both have enough space for film equipment (my other job, which is pretty much a set every 3 months atm)
Should I try to build credit before financing? I was looking at opening a credit card and using it only for bi-weekly groceries and only spending what I know I already have saved to pay it off, but I didn't know how long it would take to build credit that way and if that was realistic.
Should I finance my first car, or wait to find a used car and buy it cash?
byu/audreyokinawa inpersonalfinance
Posted by audreyokinawa
11 Comments
You should get an insurance quote as you are a high risk driver. That cost may be more than you expect
Building credit takes years. You won’t get a good rate for a while
Don’t finance a car. Buy a good used car. The bf and roommate thing can change in an instant.
Whatever you do, get an insurance quote on it first because that will probably cost you another two or 300 per month
That sort of credit usage won’t affect the rate you’d get if you financed. They want actual credit history of say, paying off a loan.
What is the total amount you are willing to spend on a car if you bought used?
There’s a lot of factors, I don’t think you will build enough credit when the time you are ready to buy, for example I’ve had my credit cards for more than a decade now? And I’m at 780-790?
When I bought my first car it was a new 2023 sante fe. I traded in my 2012 sante fe for 6500 and I had 15k down, my monthly payments are 400? I hope this helps in the financing process because what is a comfortable number you are willing to pay monthly for the car plus insurance?
20 minute commute is nothing, I’ve had 90 minute commutes, 60 minute commutes and now 40 minute commutes.
Lastly I use my credit card for everything and pay it off at the end of the month.
If you have any questions, I’ll answer them to the best I can.
I personally wouldn’t finance a car ever for the most part. Only time is when my husband needed a work truck, and it was still a used one that was 7 years old. Just do your research on the car and the people selling it. I bought my Subaru from a nice military gal whose family had outgrown it. Very good car and I got it for a great price. She had even named the car, so I saw that as a good sign that it’d been well cared for. It’s been years and has needed very minimal work. I looked at marketplace all around my state to find the perfect one that I felt confident about
Try to find an affordable place to live that’s closer to your new job.
If you cannot or either way- save money for a used car/pay cash. Financing a new car is never a good financial move- you will end up losing, always.
Majority of one’s monthly expenses are – housing, transportation, food and/or healthcare.
Control the top 2, ideally 3 and you will be able to save and have money to spend on some fun stuff too.
If you stretch too much for housing and transportation- you will always be stretched and any increase- rent/insurance/GAS/maintenance will fuck you over- don’t put yourself in that situation.
At your age do not finance. Most likely you will get a high interest rate on a 7 year loan. Until you understand financing, do not finance anything. You are a prime target for a dealer selling you on a low monthly payment that will double the cost of the car.
I can’t tell you how many people your age post on this forum about the terrible mistake that made buying a car. Make sure to get insurance quotes before you buy. 18 year old male is just about the most expensive to insure especially if you don’t cheap out. You NEED uninsured and underinsured motorists coverage to protect yourself.
I personally would save up and pay cash. I don’t like the idea of having debt. Other people will think differently.
I think a Prius is a great option if you can find a way to make it work.
I’d suggest talking to someone at a credit union to try and make financial plans and figure out a budget and potential loan (auto or personal). If you get the job and have an offer written down on paper in hand, I think they might be able to work with you. College grads with offers in hand do this all the time with sometimes pretty thin or maybe even nonexistent credit.
Do not finance a car at your age. Not only will your insurance be high but also your payment.
Look around and buy a car with cash. Nobody should be financing a car at 18 ever. Insurance alone will probably be close to 200 a month.