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!
