Need some assistance making a decision.

[Zoh]

Originally Posted by thill

You are smart to focus on getting your credit fixed and your credit cards paid off, but what is the interest rate on your credit cards? Once you get that paid off, you need to look into getting your negative equity of your current car paid down. Rolling that into a brand new car that will depreciate 10%+ the minute you drive it off the lot puts you in a bad position right out of the gate should something happen and you need to sell the new BRZ/FR-S. Also you 100% need to get gap insurance as your car is going to be worth a lot less than what the insurance would pay if you had an accident (your fault or not).

I would get the credit cards paid off, refinance your current loan to something under 10%, and focus on saving up for the new car and paying down the current one. It might take you another 6+ months or even a year but it will put you in a good place on the new car.

I think this is exactly what I'm going to do.
I'm going to go to a credit union nearby tomorrow to see if I can refinance my car loan. I want to get this thing paid down ASAP.

I think I'm going to wait until I have at least a small amount of positive equity on my car before buying myself a BRZ.

I've also settled on probably getting a used BRZ; I'll hopefully be able to find a 2014 WR Blue Pearl Limited trim by the time I'm ready to purchase, and I'll probably go out to Arizona to do so (Lower taxes, and the Subaru dealership in my town are a bunch of douchebags from what I know about them.)

If things go really well, maybe, MAYBE I'll get a new one; but I will most likely forgo getting any "Limited Edition" models as I think I would be better off saving money. The .blue series, while nice, really doesn't change a huge amount of things. I'm not a big fan of the red stitching in the FR-S/BRZ as standard, but I can live with it. Yes, the blue stitching is sexy, but can I really say it's worth all that extra money? Not really.

[thill]

Originally Posted by Zoh

I think this is exactly what I'm going to do.
I'm going to go to a credit union nearby tomorrow to see if I can refinance my car loan. I want to get this thing paid down ASAP.

I think I'm going to wait until I have at least a small amount of positive equity on my car before buying myself a BRZ.

I've also settled on probably getting a used BRZ; I'll hopefully be able to find a 2014 WR Blue Pearl Limited trim by the time I'm ready to purchase, and I'll probably go out to Arizona to do so (Lower taxes, and the Subaru dealership in my town are a bunch of douchebags from what I know about them.)

If things go really well, maybe, MAYBE I'll get a new one; but I will most likely forgo getting any "Limited Edition" models as I think I would be better off saving money. The .blue series, while nice, really doesn't change a huge amount of things. I'm not a big fan of the red stitching in the FR-S/BRZ as standard, but I can live with it. Yes, the blue stitching is sexy, but can I really say it's worth all that extra money? Not really.

Kudos to you, sounds like a really smart plan and it will only make the car even more special to you as you will have worked harder to get into it the right way. Low mileage used BRZ's/FR-S do pop up and make alot of sense.

[Tainen]

Originally Posted by Dadhawk

Obviously you've already made up your mind, and nothing is going to talk you out of it, which is OK with me, I'm just telling you what I would recommend you do, what I would tell you if we were discussing this face-to-face, and what I would do if in your shoes.


If you would be "just as happy with a 2009 Toyota Camry" then that is really what you should get. It's the "adult" thing to do (delay pleasure now so you can win later). We all have had to do it at times.


I also wasn't suggesting you pay off your student loans now, what I was suggesting is using the money to avoid additional student loans, stop digging the hole deeper.


I also think you may be counting your chickens a little before the hatch as well with the career. You are absolutely correct that its a great field (I'm in it myself) but that does not guarantee you a job once done unless there is something you are relaying in your story. Lots of excellent programmers have mediocre paying jobs.


I realize I'm "weird" in that I don't do car payments. If I can't pay cash for a car, I don't buy it, no matter how much I want it. I've done that since I was 16 with only a couple of very rare exceptions. Car payments will, over time, have a huge impact on your net worth.


Whatever you decide to do, best of luck to you and I hope it works out.

I agree with Dadhawk here.

Rule of thumb is you really shouldn't spend more than 10% of your take home on a car. AND, you should NEVER take out a loan without a real downpayment. 20%. NOT a negative equity trade in. That is very un-sound financial advice- especially if you have the monthly take home to do it the right way. Save up 20% downpayment, get out from being upside down on your current car, etc.

Honestly it sounds like you are whining and justifying your new car purchase "My life is AMAZING except for my car! It's causing me emotional distress and I'm so upset because I'm using a cheap car every day!"
Hey man, if your life is all that good, driving a crummy car is pretty miniscule.

You can easily do this the right way, in a financially responsible manner, without going 0 down on a brand new car while using loans to pay for college. But it doesn't sound like you want to do that- you want a brand new car to feel good about yourself. Honestly I can relate- I wanted to rush out and buy a brand new car after my first high paying IT job. My dad talked me out of it, worked with me on a savings plan, and I saved up and put 10k down on my first WRX, and I'm so happy I didn't do a zero down loan. I'm so glad I had someone in my life to walk me through the financial scenarios and teach me the benefits of high downpayments, low loan amounts, interest rates, monthly budgeting, etc.

I'd strongly suggest going and posting on the PersonalFinance subreddit. You will get real advice from financial advisors who have a passion for helping people set themselves up for successful lives. Living with 30k debt just so you feel better about your ride is a really bad move.

edit:
I want to share why this is important. Because I did go save up that 10k, budget appropriately, etc. I was able to, 2 years later, purchase a 200k condo. Because I didn't have unsecured debt, I had a large savings account, and my budget was firmly under my control, not the bank's. I then was able to pay cash for my wedding, sell my condo at the worst of the financial bubble and buy a house with 20% down for my new family. All because I was able to be fiscally responsible and save my money instead of giving it away to the banks. And I still had my WRX, which was fully paid off. By being extremely fiscally responsible, you are setting yourself up for massive financial success later. Most of my co-workers still live paycheck to paycheck, even above the 100k threshold- it's just more expensive cars and loans and clothes. If you do it right, you can live like a king, debt free, with massive amounts of buying power- paying cash for sports cars, avoiding interest completely, having large monthly buffers between your bills and your income, etc. All of this is robbed from you when you go 0 down on loans and live like your personal happiness is worth sacrificing your finances. I can tell you, I'm effing happy with my half million dollar home, three cars, all paid off, and a six figure job with zero debt. Sounds like you could have that future too- but a 30k loan right now would set you back potentially up to 4 years.

[thill]

It depends on your loan rate. If you can get a loan for under 3%, and depending on your situation, it might make more sense to fully finance the car and put the money you saved for the downpayment towards higher interest items, or something like a house.

[Zoh]

I had a whole long reply typed out to this earlier, but it signed me out and deleted it all when I went to submit it.

But I'm going to be short and blunt. I understand that financially, in the long run, it is going to be better for me to save my money, deal with my piece of shit that I hate so much I wouldn't even wish it upon my ex-girlfriend, and get whatever new, awesome, hot-shit sports car is out 6 or 7 years from now without paying a penny in interest.

That being said, I bluntly and honestly just don't care. I am happy and willing to spend a few extra thousand dollars over the course of several years in order to get something to enjoy now that I'll be happy to keep for the next 5-7 years. If I start making significantly more money in that time, great; I'll pay the loan off sooner, but I'll be happy with my car enough that I'll be willing to keep it until that point.

I've got one life to live and I don't know when my time will expire. I don't want to grow old and regret not enjoying myself while I was young enough to do so. Fuck, 6 or 7 years from now, for all I know I could be starting a family and having a car like this may not be very practical; right now, I am in a place where I can enjoy life and afford the payments.

Yes, I understand there are risks; I could lose my job (I've had a good track record of not getting fired so far, I think I'll be OK on that) or total the car (I haven't had an accident yet, but I get there's a first time for everything), but I'm quite OK getting gap insurance to cover the loan while it's underwater.

I cannot be dissuaded from getting a new car. Point blank. Period. Call me stupid, call me stubborn, call me whatever you want, but I am not getting any younger and I don't want to wait until my mid 30's to get rid of this fucking Versa. Sure, I can get something else, but if I'm going to get a new car, why not get one I want that I will be happy with? Why push myself to get something that I don't really want when I already have a perfectly shitty turd on wheels that I don't really want?

I'm not completely sacrificing my future; I'm putting away into a 401k which my employer matches, I'm investing in stocks, etc.

Some people live for the future, I live for the present. I'm not a thrill-seeker, but I don't know what my future has in store for me. I will prepare for it and put money aside for it, I will push myself to get the best career I can get to help me prepare for it, but a lot of things can happen in 35, 15, heck, even 5 years. For all I know, I could get injured one day and not be able to drive; nuclear war could break out; I might start a family and need a bigger car; I might end up living somewhere where it's impractical for me to own a car.

The stars are aligned for me right now to clear up my finances and take the plunge. That's what I'm going to do. If I fuck shit up, I fuck shit up. I am an extremely resilient individual who will bounce back, I have no doubt about it.

Maybe I don't get a BRZ though. Maybe I get an FR-S and save a few grand. As much as I love, love, LOVE the WR Blue Pearl and the extra features on the BRZ, the Hot Lava FR-S is pretty nice too. I wouldn't be that upset to own one. I can always install a better head unit and HID headlights down the line.

I appreciate the financial advice here guys, I honestly do. I get it, you don't want me to screw my life up. I really get it and perhaps 5, 10, or 20 years from now, I might look back and say "What a fucking dumbass I was. I should never have gotten that car."

... But I could also look back and say "Man, I'm so glad I made that choice. I had so much fun with that car, I'm glad I got a sports car when I had the chance."

[Dadhawk]

Originally Posted by Zoh

....That being said, I bluntly and honestly just don't care. ..

In that case, to answer your original question, you might as well go ahead and get the top of the line BRZ.

If you are going all in, go all in.

[AznBRZer]

$5 says the OP will be upside down and try to roll over the negative equity again in less than 5 years because he can't handle the quirks of the car.

Serious talk: Look OP, no one gives a shit that you want a twin and everyone supports you getting one if you want one, but at least learn your lesson from the Versa experience and save up some money so that you're not upside down on the loan. If paying $800(I assume this is for the credit card and car payment) for the next 3 months is stretching your finances, give yourself a cushion so that you don't have to pay $500 a month on the car itself when your student loan payments start kicking in.

Or let's say you get your gf pregnant. Gap insurance only covers you if the cars gets fucked up somehow; not on the trade-in if you need a bigger car, which would leave you in the same financial hole you're in now, if not worse because you have a kid on the way and you decided to finance over $30k for 6 years.

And btw, I'm pretty sure you have to pay taxes on the car even if you buy it in another state.

[ashtray]

A BRZ can be the same price new as an FRS. Depending on dealer.

I'm still surprised there's no other car made in the last 5-10 years that you would enjoy driving. There's so many that are better than the Twins that I'm afraid you get a twin, then find out it's too slow/small/uncomfortable, and you're locked in for the next 4 years.

Yeah, and unless you can register the car in another state, the taxes are owed to the state/city you live in.

[Zoh]

Originally Posted by ashtray

A BRZ can be the same price new as an FRS. Depending on dealer.

I'm still surprised there's no other car made in the last 5-10 years that you would enjoy driving. There's so many that are better than the Twins that I'm afraid you get a twin, then find out it's too slow/small/uncomfortable, and you're locked in for the next 4 years.

Yeah, and unless you can register the car in another state, the taxes are owed to the state/city you live in.

That's fair, wasn't sure on the sales tax thing. Regardless, the Subaru dealership in my town has been blacklisted by a number of people on here and I haven't heard good things from anyone, so I'll pass on them mostly likely.

There ARE other cars. The problem is that they are not really any cheaper.

The Infiniti G35 is fine, but I can find hardly any with less than 100,000 miles on them. The BMW 325i is nice too, but the only person I know who's owned one personally had terrible luck with it. I've also heard BMW's can be pretty pricey in maintenance.

Speed honestly doesn't bother me; coming from a Versa, it's going to be plenty quick compared to what I'm used to, but I'm never going to get to drive all that fast; I want something that corners well and is fun. Straight line speed means nothing to me. I'm a skinny guy and I'm not terribly large, 5'11 and about 125lbs (Yes, I eat.) so I doubt I'll find the BRZ uncomfortable.

AznBRZer; I'd love to save up to not be underwater on the car. Let's say I keep and pay off my Versa, paying it off as quickly as I can. I can probably throw about $400 - $500 a month extra at my payment quite comfortably, I'd still be stuck with it until around October of next year. Let's say by that time it's depreciated in value another 20%, now it's worth $4,000, assuming no major mechanical problems arise that I have to spend the money on. (It'll be approaching 100k miles by then)

Let's say a new special edition BRZ then is about 30k out the door, ballpark. Depreciates 25% as soon as you drive it off the lot, now it's worth 22.5k, so I'm still $3,500 short

Then I put $500 a month aside towards a new car each month, that's another 6-7 months before I have the rest of that downpayment saved just to be break-even on the car. I'm looking at sticking with a car that I absolutely hate (And haven't liked since the day I got it. It was bought out of necessity, not desire.) until around May of 2016 just to get breakeven? I'd rather be upside down on payments and have gap insurance.
My girlfriend is 100% not getting pregnant; that I can guarantee.
$800/mo isn't stretching me right now, I can comfortably afford a car payment of $500 with a decent chunk of money left for student loans.

On the flip side, let's say I get a used BRZ Limited for $25k OTD when I'm breakeven on my car (Likely December) and have 0 negative equity on my current car and the trade-in just pays off the current loan. The BRZ depreciates 25% still, so it's worth $18,750 and I'm underwater $6,250. With a 4% interest rate on a 25k loan for 60 months, I'm looking at paying $460/mo.

In May of 2016, I will owe $18,415 assuming I have not made any extra payments towards the loan. If I can even throw an extra $100 towards the principal of the loan every month, it will be at $16,669 remaining on the loan, which I feel would pretty close to not being underwater for a used 2014 BRZ in May of 2016.

Long story short, either way, mathematically, I end up breakeven on the BRZ at about the same point in time. So, one way I'm in positive equity while I'm getting there, but will hate the fuck out of my car the whole time, the other way I'm in negative equity while I'm getting there, but I have a car that I enjoy driving and am proud of. The net result has approximately the same outcome. One way I get a special edition, brand new; the other I get one that I'm still perfectly happy with.

Maybe I'm doing my math wrong, but it seems I'll be uncomfortable one way or the other while I'm getting to a place where I can have positive equity on a BRZ.

[Dadhawk]

Originally Posted by AznBRZer

...Or let's say you get your gf pregnant. Gap insurance only covers you if the cars gets fucked up somehow; not on the trade-in if you need a bigger car, which would leave you in the same financial hole you're in now, if not worse because you have a kid on the way and you decided to finance over $30k for 6 years.

That's the part that @Zoh is not considering, Risk. Been there, done that one, got beat over the head with it. First 18 years of my life lived with it every day in my Parent's lower middle class (at best) home.

Here's the difference between owning a car and paying for a car...

The situation above happens (girlfriend is pregnant, you lose your job) and you have a car payment, now you have to worry about losing the car, having a ride, on top of everything important.

If the car is paid for, nobody is going to take your ride, and you have transportation. Worse case, you have an IMMEDIATE source of cash, because you can always sell a paid for car.

Even in the "Versa situation" here (bought it, don't like it, can't get rid of it) you can avoid the whole issue with a paid for car. Sell it, trade it in, take the cash buy something else.

Look, I'm not rich by any means (definitely not close to a 1%er, although I plan to be "evil rich" one day) but I have 5 paid for cars (bought with cash, and only the FR-S was new) and a paid for house (just paid it off last week, 7 years early on a 15 year loan). If I lose my job tomorrow, the only thing that changes for me is the time I wake up the next morning to start looking for a new job.

Oh, and I have enjoyed life every day since being on my own, not having payments has never made me feel deprived because not owing "the man" is much more satisfying than driving the C7 Corvette I've been jonesing after lately.

And btw, I'm pretty sure you have to pay taxes on the car even if you buy it in another state.

Yep, states closed that loophole years ago.
@Zoh, I sincerely hope this all works out like you plan, and it sounds like you have fallback coverage with your parents, which I guess is good although not sure they are doing you any favors, so I'll leave you alone now.

[Zoh]

Originally Posted by Dadhawk

I sincerely hope this all works out like you plan, and it sounds like you have fallback coverage with your parents, which I guess is good although not sure they are doing you any favors, so I'll leave you alone now.

No fallback from parents.
Don't talk to my dad, mother has never in her life made as much as I make right now. Grew up pretty poor, finally climbing out of that hole.

I know I'm coming off as super arrogant or ignorant. I know what the "smart move" is, but my nature is to be a risk taker; I play poker in addition to my job (Though not much lately). I try to take calculated risks; sure I can take the safe, smart play and live with this car that I hate and try to make the best of it.
Maybe I should get something less expensive for now that I can afford to pay off in a couple of years. I mean, I could borrow $12,000 on a 36-month loan @ 6% and probably be able to pay it off in two years and get something that I'd be happier driving than my Versa.

The problem is I cannot find something in that price range that I can see myself particularly enjoying. I don't want to buy something that's already over 100,000 miles and I'm not really a fan of American cars. I don't want an Altima, Accord, Civic, Camry or Corolla. Lancer's are OK but not really my style. I don't mind the Scion xB, I guess, but those are around the $15,000 mark.

I guess, yeah, I could live with the Versa for another year and have it paid off in full by October, but I'm sick of my TPMS light blinking at me because the sensors in the car constantly fail. I'm sick of hubcaps falling off because I went over a speed bump. I hate looking at the chip in the windshield, the scratches on the bumpers and the fogged up headlights that were all there when I got the car. I'm sick of seeing the dent in the bumper that my mom did when I was trying to teach her how to drive (I gave up after a month and this dent.) I hate opening the rear hatch and seeing all the duct tape I had to put on it because the plastic in the rear was so cheap that it cracked and a huge chunk fell out a month after the dealership fixed the rear hatch because it wasn't opening. I hate the beige interior that looks dirty because jeans stain the shitty seats. I hate trying to accelerate for any reason, only to barely move any faster. I hate the horrible suspension that lets me feel every little bump and rock I drive over. I hate the speakers that rattle if I turn the volume up and sound tinny and shitty when they're low anyway. I hate that anything I leave on the back seat now will smell like cat pee afterwards.

I could live with a few of these things, but FUCK there is a ton of stuff I hate about this car. I just can't do it.

[Zoh]

Originally Posted by AznBRZer

$5 says the OP will be upside down and try to roll over the negative equity again in less than 5 years because he can't handle the quirks of the car.

Also, I'll take this bet.

[ashtray]

Zoh - sounds like you've thought this through, which is really the best any one could do - take the time and think through options, weigh pros/cons, and make a decision. I think you know what you're getting yourself in to.

Go test drive one and see if you like it. You should be able to get a decent deal on a new one especially as winter rolls in. Go talk to your bank about rates.

Good luck.

[Zoh]

Originally Posted by ashtray

Zoh - sounds like you've thought this through, which is really the best any one could do - take the time and think through options, weigh pros/cons, and make a decision. I think you know what you're getting yourself in to.

Go test drive one and see if you like it. You should be able to get a decent deal on a new one especially as winter rolls in. Go talk to your bank about rates.

Good luck.

Thank you.

I honestly have spent a LOT of time thinking about this. I've been doing math and figuring things out for months before I even posted to this forum.

This is what I really want (And have wanted for quite some time. I've been eyeing this car for 2 years now, since I first saw it.)

It's not some car I looked at a month ago and said "Oh yeah, that looks cool, I'll get one;" this is a car I saw 2 years ago and thought "Holy fuck, I want one of those!" and still want more than ever 2 years later. Honestly, I prefer the look of the BRZ over some far more expensive cars (Any Mercedez, Lexus, Cadillac, the 370z, even the GTR. Pretty much any Audi except the R8, and a large number of others.)

I'm not going to rush into it just yet, I want to get my finances straightened up first as far as credit cards and credit score, then I'm going to take the plunge.

Thank you for your help, Ashtray. You've been very respectful; I appreciate it immensely.