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Aveah t1_je7hnvt wrote

I love this question! So let’s work through it! 2k down on a car, and you’ll have to finance the rest. The cost of cars you’re looking at, 5k/7k respectively, tells me it’s going to be a used, as-is, vehicle. Which is fine! No shame in the used car game! However, your CS is not good and banks know that. Financing a used car increases rates already (vs new).

So what they will do is increase your rate because you are considered high risk. They’ll want as much money upfront as they can get, because honestly, they are banking on you defaulting anyways. 10%15% is not good… I honestly think it will be even higher if you do get approved for financing. You will only find out the actual rate if you apply. Rates right now are high. I recently bought a new car, and I have excellent credit and income, ideal DTI as well. There was no way I could get my rate lower than 5%. My last car was 2.9% I’ll just have to refinance later when rates drop.

However, cars are not something you put money down on and pay your monthly car note and be good. Think bigger.

Insurance. Fuel. Repairs. Maintenance.

Insurance would have to be full coverage since it will be financed, the cost will be solely based on you, your history.

Fuel is going to be fairly expensive considering how far you mentioned you’ll drive. My fuel cost alone each week is about $40. And I live within 10 miles of my office. With an occasional shopping trip or grocery run. It’s always a sad day at the pump.

Repairs will sneak up on you and it’s so funny that they usually do when you’re broke! But used cars will need them. From previous experience, repairs happen more when I needed a reality check. And those can be pricey…

Let’s get to the end here, maintenance. Oil changes, tires, tune ups, car washes, wiper blades, etc. Even registration. Those are things you have to do and they aren’t free.

So let’s try to imagine the true cost of having a car with everything in consideration. In theory, you could put the 2k toward your debt, knock out the rest in just a few months because what you would spend monthly on a car (note, maintenance, insurance) can all go toward your debt instead. 😀

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AreYouEvenWhite OP t1_je7whu8 wrote

This was beautiful. Thanks for that. Worded to perfection. That is all very true too, however maintenance and repairs can be done by me. I picked up a 1k car and repaired it, but it needed an engine swap at the end. I've only put 1.5k to learn the majority. I know how to full-on rebuild minus engine swap. That was going to be expensive for a rebuilt title, so I didn't do it.

However, this is something very true. Insurance and gas will be eating at me, plus the sneak up registration. With the current debt I'll have. Tackling it all will put a heavy load on me mentally and physically since I'd probably pick up additional work.

I'll focus on the debt, not worrying too much about a car other than putting money away for it. When I can pay it off, my debt is only when I will focus on a car situation.

Thanks for this post. Have a lovely day!

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Aveah t1_jeaci3e wrote

You are most welcome! Your debt isn’t really that bad! It’s totally doable! Focus on the debt, establish a healthy financial relationship with credit, and don’t forget to invest in your future self! Good luck!

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