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Can I afford this car?
Hello ft86 community,
First of all, I realize taking financial advice from people on the internet is a bit silly but I figure that some of you have to be in similar situations so I need your help. Lately it seems I have been going a little crazy asking myself the same question over and over again without making any real headway, "Can I afford this car?" First, let me describe my current situation. I'm 20 years old, work part time and attend a local community college until the fall of next year when I will be transferring to a four year university. I currently only work about 20 hours a week which earns me just about $800 a month, and a net income of $600 after expenses. I live at home so I don't pay for anything but school, food, and gas. I currently drive a 2010 Honda Civic EX Sedan that is has a little over 15,000 miles on it; I have owned the car for a little over a month. I was given a 2006 Santa Fe when I turned 19 and it was recently totaled so the insurance gave me $10000 for it and I paid the other $7000 for the Civic. I pay for half of my tuition out of pocket and the rest I finance through college loans; I currently owe about $5000. However, the universities I am looking to attend next year will cost around 25k a year. I have about $4000 in the bank, not counting $2000 which I keep in an emergency fund. I found out about the FR-S about three weeks ago and I absolutely fell in love with the car aesthetically, unfortunately I haven't been able to find one to test drive. I have only been driving for about a year and half now and am hesitant to purchase a manual because of the traffic where I live, however I am not entirely against the idea. The model I am currently interested in is the Asphalt FR-S AT. The out-the-door price of the vehicle that I have calculated is as follows: MSRP- $26,030 (Including destination fee.) Dealer Fees/Licensing/Etc. - $250-$300 (Could be more?) Tax - $700 (In Ohio the tax is calculated based on the difference in value between the new car and your trade in, which is $9000 in this case.) Total Price - $27,030 I am hoping to get $17000 for the Civic based on the Kelley Blue Book trade in value. So that would leave me with about $6000 I would need to either finance or borrow from my parents, who think I'm crazy for wanting to buy a new car just after getting the Civic a month ago. My questions are: 1) Can I afford this car? 2) Am I crazy? One of the things that comes to mind is that I still live at home, mainly because it's practical and saves money. You would think that I would want to get a place of my own instead of buy a car but I only have to live here for another 4-5 months max until I leave for school. The other obvious option is that I save the money and invest it in mutual funds and pay off my $5000 debt, but that's not very fun is it! I can pay off the $6000 loan in just about 30 months if I pay $200 a month and save the other $400 for school. That is of course if I borrow it from my parents at 0% interest, if I finance however I think I will get raped by the interest rate due to my non-existent credit history. I doubt my dad will co-sign a loan because he is against the idea of me getting this car in the first place. So if they don't loan me the money they I am forced to wait about 8 months until I can afford to buy it all in cash. Thanks for reading and I would greatly appreciate your opinions/advice! :thanks: |
The old saying goes: "if you have to ask..."
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As a fellow 20 year old university student... Not a prayer.
Especially considering that you have debt, I don't think anyone else will give you a different answer. You won't be working while away at school, will you? I dunno, seems like a no brainer... |
A car in current situation should be getting you from point A to B.
Suffer now and enjoy later. |
looking to the internet for answers to these kinds of questions is always a bad idea. be prepared for a few bone heads to say some unkind words....or not, but yeh. wait a few years and find an old guy who's only put 10k on the odometer and wants to sell it for cheap. it happens.
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College students with debt can only really afford cheap beaters or hand me downs. You're not going to be looking at this car (or any other new car for that matteR) until you land a job after graduation. And not just any random low paying job, a career job that you know you'll be in for the long haul.
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Don't forget gas and insurance will add to the monthly expenses of the car.
Selling your Civic and using that money would help a lot, you'd end up owing around $10k-11K. I'm on the same page as you, but I'm planning to get one next year and not this year. I'm 19 though. My plans are to work for a year, sell my car for 10k and then finance the rest. Since my dad's a salesman, he can probably work something out for me. I don't do loans from College as I know it will add up. If you know how to manage your money, do it. If not, you can always get a used one. Start saving and see what happens! |
Sometimes even i question myself if i can afford this car..
and i make 45k living at home with parents... |
A wise man once told me...
"The uneducated pay interest, the smart make interest pay them" AKA, more money in your pocket, the more money you will have. Don't buy the car, man. NOT WORTH IT. Suffer the pain of discipline with your money now, make it work FOR you so that in the future you won't be working as hard. |
I would NOT buy this car in your current situation if I was you.
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I started college in 2000 right when the S2000 came out. It was my dream car.
I couldn't afford it until 2006. After college after I was in my job for about a year. And even then there was more expenses than your average car. I'd say buy a used miata, have some fun, don't think about this car and pick one up used for about half. |
Don't do it. You're young. Wait a few years and finish college...then find a job that can cushion yourself financially so you can happily enjoy the FR-S at a later time.
I've been down that path before when I bought a BMW a few years back. Yes, I enjoyed the car but I was financially miserable because of the costs and upkeep. |
You should wait. There will be a lot of opportunities later on.
I'm also a college student. I don't buy this car now even I have 20K of saving because I want to have some saving to make me feel secured. I will get the car later after graduated next year. There is nothing wrong about buying a "fun" beater. |
Its not a smart move for you right now. A car payment will be half - if not more - then what you make a month.
Keep the Civic for another year or two and get the car then. |
Straight answer, no, you can't afford the car. Focus on school and put money away for the future. That's the best advice I can give, whether you take it is up to you.
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Son, let me tell you a little story... ;)
When I was 22, and just a few months shy of graduating from a four-year college, I bought a 1991 300zx Twin Turbo. I had been obsessing about this car for months. This was way back in 1999, back when obsessing over cars was hard to do - for one, there weren't tons of car forums and car sites to obsess over. At that time, I resorted to the free "for sale" magazines you see at the grocery store. I'm telling you, I LOVED that car for months on end, and HAD to have one. At that time, a decent 300zx TT was around $15k-$20k and up. I had a few grand in the bank, and I rationalized the purchase by saying to myself, "soon I'll have a decent job in the computer industry (this was before the dot-com bubble burst), and I'll be able to easily afford this." So I bought one. And soon, I did have a decent job making OK money - not a lot, but at the time I thought it was. But it didn't matter - between the car payments and insurance, plus general maintenance, the cost was significant. And, the car was so nice that it caused me to stress out about where I parked...it caused stress when I needed to haul anything and couldn't...in general, it just caused stress. And when you're in your early 20's, the last thing you want is stress - that's the time to just have fun and not worry about saving money or paying large bills, cause there will be plenty of that later. It was sad because this car that I LOVED was soon the object of my hate. I literally thought of creative ways to get rid of it, because for some reason the idea of simply selling it (after nearly a year if pining for it) seemed wrong...almost, embarrassing. Sorry for the long story, but your post reminded me so much of myself and that stupid 300zx. Don't get me wrong, I loved that car and have fond memories of it (I still love those BTW), but I would have loved it even more had I just waited a couple of years, for a time when I could easily afford it and appreciate it without worrying so much about it. Cliff's Notes: Don't do it. Wait until you're well out of college and make good money. You'll be happy you did. |
Call Suze Orman, boyfriendddddd
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TO OP: Your choice. I'll leave with this: "Prepare for the worst, Hope for the best." |
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To the OP: Keep the civic for now, you're young and in school. You'll eventually want to go out or go somewhere with friends and having a car that can handle that is always a plus, not to mention the occasional task of moving personal stuff. It's also paid for and most likely cheaper on insurance than the FRS will be. That's not even including the random expenses that come up in life, better to be prepared and have cash and all to fall back on than be stressed and go paycheck to paycheck. And if you're really just itching for a fun to drive car, the sound of a used miata isn't too bad...they're definitely fun. |
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College is all about studying, having fun, networking & women. After spending money on tuition expenses & the likes; the rest was spent on hanging out & having fun with people.
The worst feeling to having, IMO, is not having enough funds to hang out or do things a person may like because it goes towards really unnecessary tangible materials. Luckily, I had good friends that got me but still I hated that feeling. |
You're driving a 2-3 year old Civic. I think you're better off than 90+% of college students. You can wait. Live below your means.
Also in my experience, you'll always get less than KBB's value for your car. Finally, never borrow money from your parents. Do it on your own. If your dad is against the idea of you getting a new car, why would they loan you the money to do it anyway? I think you'd be better off spending less and getting your own place. While you're at school it's a great time to practice living on your own. Also no girl wants to go back to your parents' place :) Patience grasshopper. Brett |
I would sell the civic, and buy an older car, and pay off my debt using the difference if I was in your situation.
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No you can not afford the car. Take the advice of most who have replied to this thread.
I always think of things like this.... If you choose to NOT buy the car now, you can always do it LATER. If you choose TO buy the car now, and end up in financial ruin, you will only LOSE a boatload of money and set yourself back by 2-3 years. In the long run, you will surely be able to comfortably afford the car much sooner by waiting, instead of trying to push the envelope now. Another thing that costs people a ton of money that most of us don't calculate, is the cost of flipping vehicles. It's not just price sold and price paid, there's registration fees, taxes, etc. that can add up QUICK. I once bought a car and traded it in after only 3 weeks of ownership. Granted I got a great deal on it, AND traded it in for more than what I paid, but I still lost the $800-ish in registration/tax because I had to pay it again on the next car. |
While I agree with the answer everyone else has been giving you, my reasoning is a little different.
You're in a nice situation with the civic because you have a lot of equity. It's a great car to own because it's going to keep very high resale value in the coming years because it's fuel efficiency is very good. It's nearly a liquid asset! If you needed to, you could put that car on craigslist and sell it in a day or two and get a very good price. The point in all this is that it is a safe place to have debt tied up. It won't depreciate as quickly as most other cars (especially a brand new one that drops $2k+ the day you drive it off the lot). It will also remain in very high demand in the future, so you'd be able to sell it quick if you needed the cash. You are in a stage of your life that typically involves very large and quick transitions.. you may have a number of different events come up that might require a reformat of your debt structure. Having the civic is much smarter than having a FRS/BRZ because it'll be more liquid. It will also cost you less in payments and insurance and have lower risk of theft or speeding tickets, etc... Despite your love for the BRZ/FRS.. you would be much wiser to hang on to the Civic while you get through these transitional stages of life.. Wait until you finish school, find a place to live, and settle down a little bit.. then buy a toy.. heck.. you might be able to get a much nicer toy than the FRS at that point and you'll be happier for it. Just my $.02.. take it from an older guy who's been there and made those mistakes. |
Short Answer=No
Long Answer=Could you get it, yes, but the reality is it could make you car poor and if you ended up loosing it because you couldn't pay the bill, how much fun would that be? None, it would suck. Finish your school, there will always be a car that you will want. |
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me and my gf eat out alot ... 30-50 a meal ... and i like my starbucks ... 5 dollar a drink .. funny how little things add up at the end of the month. :mad0259: |
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kbb says $17k for your civic? expect the dealer to give you $10k.
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One more tip for the OP..
Even if you don't need the student loans.. take out as much as they will give you right now in subsidized loans. Don't take unsubsidized loans if you don't have to.. But if they will give you more money in subsidized loans.. take it!! Subsidized loans accrue zero interst while you are in school. So, it's free money until almost a year after you graduate. If you can get an extra $20k, take the money now and invest it.. then as soon as you graduate and they would convert to start charging interest.. pay them back and keep the interst you've earned. Plus, it'll help establish some credit history for you as well. |
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I don't drink much so I guess that helps... |
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Start saving each month, and before you're done with school you'll probably be able to go in and trade the civic plus your saved cash for the car and own it debt free. That way when troubles arise you'll not be in a bind financially, you'll have worked hard for that car and appreciate it more, and you'll enjoy it a lot more without having to make payments. I would have really struggled making car payments in college on the $600/mo I was earning after buying books, paying rent, food, dates, other bills, etc. How awful would it feel to have to sell your car because you couldnt afford the payments? My $0.02.
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Sell the civic, buy a cheaper miata, use the remainder to pay off debt AS SOON AS POSSIBLE.
Sure, you might have a LITTLE more fun in the FR-S, but is it worth accumulating additional debt at your age? The answer, I think, is obvious. |
As someone who bought a cheaper new car when I was in college and only working 20hrs a week, dont do it.
Dumbest thing I couldve done, just keep the civic in nice shape and enjoy the MPGs for now. Get a new car when youre out of school and have a full time job |
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yolo
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