How to buy my first car with no money?
January 31, 2010 7:37 AM   Subscribe

How does a broke graduate buy their first car on a laughable income?

I graduated last year and am now a teacher & farm manager for an Educational Farm in rural New England. I make $200/wk and have free housing, utilities, WiFi, and health coverage.

The farm gig ends in July. I need to move on, but require a car to do so. I have $600 in the bank and make $200/mo loan payments as well as $100/mo visa payments.

Where do I find money to buy a car? My bank didn't approve the loan application due to my unstable finances. Would it be wiser to just move to a big city and keep saving?
posted by Etta Hollis to Work & Money (13 answers total) 2 users marked this as a favorite
Best answer: My advice: Avoid debt at all costs. Find the job first, then the car. You are already partially out of financial control if you are making Visa payments rather than paying the whole thing off.

Why is a car central to your needs? Cars cost money to operate, not just to buy - could you get by on a scooter or bicycle if you are rural?

If not, yes, perhaps move to the city and keep saving.
posted by TravellingDen at 7:46 AM on January 31, 2010

Where do I find money to buy a car? My bank didn't approve the loan application due to my unstable finances. Would it be wiser to just move to a big city and keep saving?

Probably be best because I can't see how you can afford to keep making your exisiting repayments on no income, let alone take on new debt...go somewhere where you don't need wheels, get a new job and pay off your existing debts/save and revisit your situation later. You may find you can live quite happily without a car.
posted by koahiatamadl at 7:47 AM on January 31, 2010

Pay off your existing debt first, get a job, save up your money and buy a used car outright. Or pay off your existing debt first, move to a place where you don't need a car, and get a job.

But pay off your debt first.
posted by PhoBWanKenobi at 7:48 AM on January 31, 2010

You can buy a serviceable used car for 3,000 - 4,000. If you save every penny between now and july, you can save as much as $400 / month. This means you can probably just do it- but then you'll need to buy insurance, gas, and inevitable repairs.

I think that if I were in your situation, I'd probably look at alternatives to buying a car- a motorcycle doesn't work very well in New England after November, but might be an appropriate stopgap if you can get to where you're going by mass transit after the weather gets bad.

I'd also assume that your wages will go up when you find the next job- you're earning less than $12,000 a year right now , the next job has to pay better (otherwise, why did you bother graduating?).
posted by jenkinsEar at 7:52 AM on January 31, 2010

You might want to consider just buying a dirt cheap car until your finances approve and you've managed to save a bit. By that point, hopefully your finances are more in order and you won't be pushed down the route of a still crap car with punitive interest on top.

If you're looking for a cheap, cheap car, then the simplest advice is to not go to the trade: they want a profit margin, and you're the margin. Buy privately.

Best of all is too see if a family member, friend, or acquaintance is trying to offload something with ease. If the car was only ever going to sell for, say $400, then selling it to a good home for $250 isn't always the worst option. To put this in context, a friend of mine drove about in a car for six months that he called the "pint car", because it cost him a pint of beer to buy from a friend.

The next bit advice is to look at total cost of ownership. This basically means buy small (lower fuel bills) and probably buy Japanese (better reliability). And ideally, buy before major work needs to be done to the car (which is going to be a tough call on a tiny budget, but can be done).

Throw fashion out of the window and try and find something entirely lacking in street cred that will still do the job. If possible, bring a friend along who knows about cars and can check the biggies - problems with the engine, gearbox, clutch (if a manual), chassis, power steering, suspension and brakes. You, yourself, can check some of the car's history by looking at how badly the wheels are scuffed, how worn the seats and door handles are and looking for signs of reprays of fixes - especially round obvious places like bumpers, wheel arches and so forth.

The archetypal "one lady owner" does exist, so be prepared to hunt about the classifieds section to find a small Nissan, Toyota or Mazda that's nearing the 10 year mark but preferably under the 80k mile threshold when something big is likely to go wrong.
posted by MuffinMan at 7:56 AM on January 31, 2010

Best answer: I think your idea of moving to a city makes sense, though you should be aware that living expenses in a city are higher than in a rural area.

Your priorities should be:

(1) earn a living wage
(2) pay off your debts
(3) save money to buy a car
(4) buy a car
posted by dfriedman at 8:02 AM on January 31, 2010 [1 favorite]

Dare I say it: Craigslist.
posted by bardic at 8:10 AM on January 31, 2010

Response by poster: I agree with you all that getting out from under debt is huge. I paid off $5,000 in loans this year. The farm gig is a temporary internship of sorts. NOT something that could ever sustain me.

All of your tidbits have confirmed that I need to NOT get a car, move someplace bigger and just continue to save & pay off.

I've checked the post on the most car-free friendly's given me a few ideas.
posted by Etta Hollis at 8:12 AM on January 31, 2010

A mechanic buddy of mine used to say, years ago, that any car that runs is worth a thousand bucks. Between inflation and Cash for Clunkers, that number has probably gone up (the exception to that rule, though, is the friends/family deal).

How much more money can you save between now and July? Do you know anything about working on cars, or do you know anyone who does?
posted by box at 8:29 AM on January 31, 2010

If you aren't interested in living in a major city, I have found that most university towns are extremely easy to get around without a car.

Best of luck!
posted by mmmbacon at 9:29 AM on January 31, 2010

My rule of thumb is that a car worth less than $3,000 is almost never worth buying. 3k and under is junker territory with a few exceptions if you know a lot about cars and are willing to do the legwork. A $4-6k car thats been checked out by a mechanic, is a known good model (do research), and doesnt look too beat up can last you quite a long time (think 5-10 years).

When your finances improve, you can get yourself an early 2000s Honda, Kia, Saturn, or Toyota for that kind of money. 5-6k over 36/48 months is around $150-180 a month in loan payments.
posted by damn dirty ape at 11:34 AM on January 31, 2010

I don't know what similar services may exist out there but here in the states there are a couple services called I-go and Zipcar that let you actually rent cars in various locations whenever you need one.

I haven't used the services personally but have a friend that does and he finds it useful--plus, he's a lawyer and can easily afford his own car so there's something to be said if he is using it.
posted by Elminster24 at 12:04 PM on January 31, 2010

Depending on the area you're in, you may be able to get a car for less than you think. If you can find a car with a good engine, but that is a Granny car (like say a car from 1993 that was only driven 75,000 miles), or a car that has some body damage but runs fine, you could get a really good deal. Definitely get it checked out by a mechanic though first. For example, I have a 2000 Toyota Corolla that is running great, with 135,000 miles one, but I have a couple dents in it. I was thinking of selling it for like 2000 or less. So it is possible, but you'd definitely need somewhere to the tune of 2-3K, unless you just happen on something someone wanted some fast cash for. Definitely look into Toyotas- even the ones with 150,000 miles plus can hold up fine for years, and you should be able to snag one for a decent price. Also, when you are shopping, people are usually asking a bit more than they expect to get. So offer someone less for what they want, and cash that day- you'd be surprised for what people will take on the spot.
posted by Rocket26 at 7:11 PM on January 31, 2010

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