How do I best make sense in buying a car?
August 24, 2011 11:30 AM Subscribe
My current vehicle is in it's death throes. This is my first time buying a car. How can I minimize my debt load and ensure I am making intelligent decisions throughout the purchase? I'm in America...
posted by Giggilituffin to travel & transportation (13 answers total) 1 user marked this as a favorite
My current vehicle runs on borrowed time- leaky intake gaskets and water pumps are not a good sign for reliablity. KBB value of $2000 vs $1600 in repairs, not including a potential tranny rebuild. I thought about repairing just enough so that it would run and I could save up to pay for a newer vehicle in cash or have a bigger down payment 6 months down the road, but that repair money spent could be used towards a down payment on a reliable car NOW.
I am employed full-time and make <20k a year, just started going back to college part-time (semester is paid off), have no credit card debt nor outstanding loans, and hold a credit score of 713 according to Experian. However, I have very little savings for a down payment. Right now I'd probably only have enough for taxes, registration and insurance and $200 down.
Selling my HDTV, game system, and other miscellaneous items could net me another $1200-1700 cash. If I REALLY made sacrifices I could add another $500-800.
I will be going to the bank tomorrow to explore my options with car loans. I have a copy of "Don't Get Taken Every Time" on the way and currently reading through Personal Finance for Dummies trying to understand how car loans and finances work. I'm trying to use my network as a resource for vehicle options.
I've been looking at Mazda 3, Ford Focus and Fusion, and the Pontiac Vibe, if this helps.
Is my logic sound?
Where do I go from here?
Is my estimation that I can afford $6000 reasonable for a reliable 5-speed manual sedan or hatchback, or should I even be considering up to $8-10k?