For a 21YO with a full-time job making about $2,500 a month after tax. Live with my BF in an apartment we pay about $1,100 for a month.
I just got in a car crash and need a new car and I really want a newer car but I keep being told it’s unnecessary. I was driving a pretty high mileage 2010 car before. I still have about $800 left on the loan for that car and about $7-8k left on a school loan. I feel like buying a new car is safer. I was wanting to pull like a $20k loan and get a cheap base model newer Toyota or Honda sedan or something. I have about $3k in my bank right now. My insurance gave me a rental car, as part of my plan, for quite some time so I do have time to think and plan.
Should I buy a cheap used car or pull a loan and buy a newer car?
byu/Lightlicker3000 inpersonalfinance
Posted by Lightlicker3000
5 Comments
I’d recommend staying with a used cheap car. You can get a brand new car today and crash it 5 miles down the road, of course you would have better options of what happens then with your insurance as a GAP but I’d say someone making 2500 a month is just a few hairs shy of officially being considered in poverty, and you definitely would be once you get a new car payment.
So you owe $7,000 and want to take on an additional $20,000? You’d add ~$350/mo just in a loan for the car, let alone insurance, etc.
Also, what new car is $20k that isn’t crap? I’d look for a 5-10 year old Japanese (Honda, Toyota, etc).
Cheap car. You don’t have income to support a new car.
Definitely used car. Around 2010 with decent mileage can be had for 6-8k
[20/3/8](https://moneyguy.com/guide/20-3-8-rule/) guideline for car buying.