Been looking at cars mostly in the 13,000 dollar or less range but haven't found anything that fits what I'm looking for (I'm picky). So I'm thinking about jumping up to 20-25k dollar loan and getting a much newer car. I'm 21, currently living at home and in the apprentice program for the electricians union. I'm kind of worried about getting myself into that much debt this early in life but I kind of feel like I should just do it now. I've never had a problem with saving money or making payments. I've actually been paying 200 dollars a month on my bike loan to pay it off before my absurd interest rate kicks in. I'd just like to hear what you guys have to say about this. I can provide more details if you wish but I'm on the fence and would like to get some advice on this whole situation. Thanks.

 

Living in parent's home?

At 21, you don't want to add unnecessary debt that would limit your ability to get a good place to live...whether leasing an apt or buying a house.

You sound very responsible & able to make the commitment to doing what's necessary to make the higher payments for a higher cost vehicle. However, keep in mind the higher cost of insurance & the hit your credit availability will take w/a higher cost vehicle purchase.

We all want - what we want - but try to think *reasonably* about the situation & make a good well thought out decision that best benefits your future.

Good luck.

 

If it was me, with the current swings going on in the construction industry,
I'd hesitate to dig too deep. Once you've got your journeyman, you'll be in
a much more secure position.

I know it's tougher to forgo the instant gratification. Lower your standards a little,
think of your car as the work-horse and your bike as the toy/pampered baby.

Find something close to your standard, within your original budget.
Then, if you have some extra change here and there, bring it UP to your vision.

You'll be a lot more flexible finacially and insurance will also be a better deal.
It's never a good idea to live on the edge. Trust me on this, something will come up.
Either a crisis or an opportunity. Then you'll be able to act, not react.

Good luck, Ern

 

Well as it stands a 300 dollar car payment for me will hardly make a dent in my checking account. Both of you're points are what I've been thinking the past few months while searching for a vehicle but my parents were actually the ones to mention getting something more expensive. And as for the work situation as an apprentice I'll likely never get laid off for more than a month provided I can work. For the most part I can do the same amount of work as a journeyman for much less of the cost. We have a pretty good system here that almost guarantees apprentices have a job. Even if it's just working at the company shop organizing and cleaning. Not that that idea doesn't cross my mind but as it stands every person I've ever worked for has said if you're ever lacking a job don't hesitate to give us a call. I'm one of the few in the younger generation with work ethic I guess haha. But I'm going to keep thinking about it, I'm currently in the process of getting my credit score and seeing how that looks. Thanks for the advice.

 

I've been paying my own way since 18, but had a few friends that lived at home til their early 20's (23 and 25) after college. the idea boggles my mind, but they were able to bank a ton of cash. - i'd sell my soul at have all the rent / grocery money I've spent... haha

both purchased nice homes easily enough soon thereafter.

With that said, as long as you're banking money and moving towards a goal, a 20,000 car note shouldn't kill you. Don't overextend, but its not hard to calculate if you can afford 300-400 a month on a car.

Also have to factor that the extra 5-10grand you can probably get something a lot newer / less maintance.

Hell you could even go out and buy a brand new Toyota Corolla S (or any other car in this general range these things are like 17k brand new), still have some cash left over and have 5 years of maintenance free warranty.

 

Always take care for what you need first, before spending on other things in life that's consider luxury......I think what your parents are trying to say is, why buy a $13000 used car, when you'll have a peace of mind in a new car...$22K to $30K is an average new car cost...since you are living at home, 60 month/ 5 years finance should be a problem, but when financing a new car, bank make it mandatory that you buy full coverage insurance...that's not cheap Vs. If you buy a $13K car, you can get away with liability + UM.

You live at home, no rent? no child support, no worry! Would
Be a problem, and financing with build your credit...just don't overkill by going out and buy a $43K Lexus...or Beemer.

Get a new car, for the least, the first 5 years is worry free....

 

But will the maintenance costs of a slightly older car come anywhere near to the depreciation hit that you take as soon as a new car rolls out the dealers door?

 

Ill probably be the minority here, but I think buying a new car is possibly the most foolish thing most people do. My roommate just finished paying off his $13k car, from over 5 years ago (total payoff - $16k). And guess what? His car is now worth less than 3k book value, and it needs repairs totaling the cost of the vehicle. I am not a frugal person by any means, but I am constantly amazed at people who plunk down tons of their money on a set of wheels. I get the whole "its nice to have something new" thing, but I dont see the value in new cars, period. $30k for a car that will be worth half its value (hopefully) in 3-5 years? You wont believe how fast you could be upside down on a car loan. Ive never bought a new vehicle, not because I cant, but because its a ripoff. Sure, all the manufacturers have 5 year warranties, but most vehicles dont need major repairs until after 5 years anyway. If anything, Id buy a certified preowned vehicle (at least someone else paid down the total for you, ha + they come with a smaller warranty).

Thats my two cents.

 

My truck that I bought for 30k 6 years ago is still worth 17-20k in it's current condition. Some cars hold value better than others. I'll also keep my truck for another 5-10 years so it was well worth paying for a brand new car for me.

 

This all depends on what you buy. If your getting a full size truck, a jeep wrangler, certain Toyota or Honda car models then new would make sense. Any thing else and the best scenario is to find something in the 6-12 month old category in my opinion. That way the initial deprecation is gone and it's still practically a new car. When I bought my last one in 2007 it was 9 months old with 9k miles. I paid 5,000 less than sticker.