Buying a new car the year out of college, dumb or not?

[Enraged21]

Originally Posted by FRyeS

My advice would be to not take financial advice from strangers on a message board (I'm totally not trying to be funny here)

That said - If it were me, I would pay off the $22k before I considered taking on more debt that I didn't have to.

you're defeating the purpose of what you said lol

[Books]

While the advice about not putting on more student debt is valid advice, it looks like you can easily afford it. You're on track on your meager loan payments, you live at home, and you mentioned your stingy about money... all good things.

So my advice is to wait a few months and save for a nice fat down payment... probably $5k? maybe even $10k? and then go buy the car. Get a loan through Toyota and you'll get a nice rate and $500 off MSRP. Get a 6 year loan and you'll have nice tiny payments. You can decide to pay extra each month to speed it up if you want too.

Also, don't forget that this car takes Premium (though still decent MPGs). I average about $200 a month depending on how I drive.

PS That's what I did (graduated last year) and i'm not looking back. I was pretty much in the same situation as you last year (and still am I guess)

[Re~Mix]

Pretty much everyone I know either picked up a new car or certified used car post graduation, regardless of their loan situation.

What stands to be said, is whether or not an impractical sports car is necessary right away. When faced with the same situation (albeit living on my own, away from home), I bought the FRS.

I'm gonna be in debt for 4-8 years regardless thanks to school. I may as well enjoy myself a little bit and not live off ramen just to pay back my loans 2 years earlier. With the new grad discount, scion also gives you a very nice 3.0% interest rate.

[Alabang 86]

I would wait until you get the "perm" sorted out....

[s2d4]

Never buy a car on finance if you can not pay up immediately.

[chickdigger802]

Originally Posted by Alabang 86

I would wait until you get the "perm" sorted out....

well... yeah that of course

Hopefully in June there will be more cash incentive from toyota/scion for college grads.

[Zaku]

My only advice is pretty universal lol, Don't add on to your debt if you have any, and it's the best feeling in the world to not owe anything to anyone.

cause who here whats to keep a debt, especially in these shaky times. I graduate about the same time you do,I've known about this car pretty much since the first leak, and I could walk out and buy one at anytime, but I haven't because I know if I do as rewarding as it maybe I'll just be making debt. Your dad is right wait till you have at least half the car, but I think in addition that School loan comes first.

Your choice though I know how tempting it is to want to buy one or set money aside for one right after graduation, trust me I'm in the same position.

But Priorities man and if you do want it look into Subaru VIP and Scion College Rebate.

[comic0guy]

In the end do what you are most comfortable with.

My suggestions:
- Establish a 'rainy day' fund, usually 3-6 months of expenses
- Put away a good chunk of money for the car before buying(lets say at least 5-7k or more) (figure out a theoretical monthly payment and put that into savings every month....this way when you get the car, your monthly budget doesn't change)
- Use the parents' cheap rent as an opportunity to build that 'rainy day' fund


Just figure out your priorities in life, and the money can follow those priorities. Everyone talking about houses and whatnot are not wrong, those are just their higher priorities in life. Plus for me, after buying a second new car(yea i know, not the smartest move), it proved part of my strategy, that getting my auto loan improved my credit situation(ie not much of credit history) and should set me up nicely for when i buy a house.

My rule of thumb, if you feel like buying more a luxury item (a car you don't need), then put equal if not more money towards a smart decision (house downpayment, stock investments).

I was in your situation, and lived with my parents for three years before i moved out. I saved a ton, paid off student loans, had 22k for a car, and investments. Those years of savings and investments have set me up nicely.

[ntron1]

Comic0guy provides some very sage advice. Given the still fragile nature of the world economic situation, you may want to at least wait until you are no longer a contract employee before pulling the trigger just to be sure your future is a little more secure.

[_hollywood]

You drove a beater and are almost done with college and have a job already, i say if you can throw down 5k on it then do it, you are being more responsible than half of the current owners......do it

[brzinga]

I graduated about a year ago and I'll second comic0guy's recommendations. Waiting a year or so and putting aside an amount comparable to a car payment for a while is probably your best bet (that's what I've been doing).

You may also want to consider that when financing a vehicle, they will ask how long you've been employed at your current job. This could be pretty important if you don't have much credit history.

In the end if you think the car is a high priority for you, go for it.

And happy graduation

[shawnperolis]

haha so I am I the only person who bought their car before they graduated?

[kykiee]

I bought my car a year after I graduated. I also have school loans to pay off and I live with my parents. If you can get a low interest rate of 2% or less, then I think you can afford it. If I was you, just wait another year to save up for a good size down payment and you will have about half your loans paid off by then.

[hanabie]

No offense. This is a simple life decision. A grown-up man should make the decision without posting a thread like this over here. I find it is quite an embarrassment.
Also, you are buying a 30k car, not a Ferrari. If the decision is really that hard, you should probably consult first with your mom and dad. If they can't decide it for you, we will be happy to tell you what to do.

Sorry I'm harsh.