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

[shirker]

OP, a piece of advice I'd give you that I haven't seen echo'd in this thread is that you should be allocating some of your money into a retirement savings fund of some sort. It sounds like you'll be employed by an engineering firm in several months time - what is their 401k matching? Max their contributions, and aim for ~10-15% of your gross pay overall. Start a Roth IRA if you don't have one already. Max your yearly contribution to that ($5500).

If you can factor in these savings/investments and still be able to afford your car payments, then it's hard for anyone to argue that you're being fiscally irresponsible - one man's "waste of money" is another man's discretionary spending

[P@ul]

Originally Posted by Alabang 86

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

AMEN! Make sure you actually get that permanent conversion, not just lip service.

Check your insurance rate at your age as well. Last thing you want to do is spend all your money on insurance instead of making payments on your student loans and car loan.

You should be able to knock out that $22k in a year, especially if you live at home... That easily frees you up for a car payment.

[Enraged21]

Originally Posted by shawnperolis

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

Nope. Bought mine and I'm about to get my AA. Haven't even got a BA yet.

[bakerr6]

I had a brand new car in college (2010 mustang) and did not regret it at all. When I graduated, the wife and I both bought new cars again (she boughta crv, I bought the FR-S). We both still have student loans.

Many people ahve different hobbies which they spend money on. I consider this my enjoyable hobby, so spending money on a new car wasn't even a question to me.

The only thing that may be different is that we do not have a mortgage or rent atm. Our house is paid off, so our situation may be a little different than yours.

[Mikem53]

As one of the older and possibly a bit wiser than some...
My advice would be to buy the car and enjoy it!
As long as you can swing it and pay off your other obligations..
Go for it.. The car is not that expensive.. Should hold its value well.
You can always sell it if you had to..
You never know what life will bring.. So enjoy it while you can.. As long as you are being responsible and doing well... Have some fun along the way..

[Enraged21]

Everyone's situation is different. That's why you shouldn't really let anyone tell you that you can or cannot. It's your decision only and if you feel you can get it without stretching your income, then get it. If you feel like you have to cut down on spending on certain things, wait for it.

[frslee]

I would save up few grand of "safe money" and portion of down payment before purchasing the car. I got out of college last year and just bought this car last month. I paid 4k down payment which was the "safe money" to use.

Lucky you make good amount of money right out of college.

[s2d4]

Originally Posted by shawnperolis

yeah, it's very weird being able to pay your bills and have plenty of cash left over. Judging people on the internet is really easy, bro.

I wasn't judging you, it was about the concept of afford.

Affording a car and affording the finance repayments are two different things to me.

Perhaps I grew up thinking affording is being able to pay it immediate lately, it is yours not the finance company's. But It isn't yours until you've fully paid it off if you get it on finance.

The other concept of paying all the bills and have cash left over but still in debt is also weird. You are never ahead being forever in debt if you just keep financing.... And then not actually owning anything after years of financing one car after another.

[zipfizz]

Originally Posted by s2d4

I wasn't judging you, it was about the concept of afford.

Affording a car and affording the finance repayments are two different things to me.

Perhaps I grew up thinking affording is being able to pay it immediate lately, it is yours not the finance company's. But It isn't yours until you've fully paid it off if you get it on finance.

The other concept of paying all the bills and have cash left over but still in debt is also weird. You are never ahead being forever in debt if you just keep financing.... And then not actually owning anything after years of financing one car after another.

Personally there's only 3 things I would ever finance: education, car, house. Nothing else. Everything else you need to have cash for before buying. I think as long as you are saving a good portion of your salary (15-20%) and you can still afford the car then go for it.

[FReSh]

I see no problem with it. You worked hard during your undergrad. So If you can swing it, why not? I've done basically the same thing (I don't have as much student debt, but also am making less since I'm just in graduate school for now). Might as well enjoy it now.

[chickdigger802]

Originally Posted by zipfizz

Personally there's only 3 things I would ever finance: education, car, house. Nothing else. Everything else you need to have cash for before buying. I think as long as you are saving a good portion of your salary (15-20%) and you can still afford the car then go for it.

There are other things people finance for? o_O

[shawnperolis]

Originally Posted by s2d4

I wasn't judging you, it was about the concept of afford.

Affording a car and affording the finance repayments are two different things to me.

Perhaps I grew up thinking affording is being able to pay it immediate lately, it is yours not the finance company's. But It isn't yours until you've fully paid it off if you get it on finance.

The other concept of paying all the bills and have cash left over but still in debt is also weird. You are never ahead being forever in debt if you just keep financing.... And then not actually owning anything after years of financing one car after another.

Why wait until you've saved up enough to buy it in one go? What if I die while saving up? That would suck. Life is way too short for your mindset, in my opinion. I made sure to save up enough for a down payment to keep my minimum payments very low, so in case something happens I can always swing the bill. I graduate in 2 weeks and I'll be working full time then for much more money, so if I really want I can just dump a bunch of cash on the car and pay it off in a few months. If you never finance anything in your life, good luck financing a house... Or do you disagree with people who have mortgages, too? Feel free to do as you please, but being able to "afford" something is just that - being able to afford to do it. Saving up and buying everything with cash isn't always ideal.

Back to the OP, figure out your own finances and do what you can afford. If the payment isn't too high and you won't be strapped for cash every month, I say go for it. If you decide that the car isn't worth the payment, then don't do it and save up for awhile.

Your student loans don't help your credit, they can only hurt it. Eventually you will need to finance something pretty big like a car if you want to establish some credit. Just be smart and you won't have any problems.

[gily25]

To qualify for better rates you'll need to show at least 6 months of employment and temp work doesn't usually count. During that 6 month period save yourself a nice downpayment.

Also during that 6 months you'll learn whether you dislike living at home. Once you start living on your own the living expenses add up pretty quick. If you buy a car based on living at home you'll either strap yourself financially or be stuck at home.

[suaveflooder]

Originally Posted by shawnperolis

Why wait until you've saved up enough to buy it in one go? What if I die while saving up? That would suck. Life is way too short for your mindset, in my opinion. I made sure to save up enough for a down payment to keep my minimum payments very low, so in case something happens I can always swing the bill. I graduate in 2 weeks and I'll be working full time then for much more money, so if I really want I can just dump a bunch of cash on the car and pay it off in a few months. If you never finance anything in your life, good luck financing a house... Or do you disagree with people who have mortgages, too? Feel free to do as you please, but being able to "afford" something is just that - being able to afford to do it. Saving up and buying everything with cash isn't always ideal.

Back to the OP, figure out your own finances and do what you can afford. If the payment isn't too high and you won't be strapped for cash every month, I say go for it. If you decide that the car isn't worth the payment, then don't do it and save up for awhile.

Your student loans don't help your credit, they can only hurt it. Eventually you will need to finance something pretty big like a car if you want to establish some credit. Just be smart and you won't have any problems.

This is a poor mans way of thinking. "How much down, how much a month?" Rich people ask, "how much?"

The advice you just have him is so dangerous! "Well how will I ever afford anything without credit? It's called 'money'"

You can finance a house with no credit. You've paid bills and had a work history. You will need to find a loan company that deals with these kind of loans, but it is more than doable. That is what i plan on doing.

It's hard to have to wait for things, but it is better in the end and you will find that you have more money. You walk up to someone with an exotic and ask him what his payments are he will laugh at you. Wait what? Someone paid $250k+ for a car in cash? Isn't that the same price as a house??

It can be done