Submitted by Fictional_Ferret t3_yo824t in personalfinance
I had a car that was paid off. Someone ran a red light, hit me, and totalled it. Now I'm buying a new car. Dad (spender) wants me to go new, I'm (saver) thinking used. I'd like a third opinion.
For my new car, I want a subcompact sedan. I like very small cars with good gas mileage. My old car was a 2010 Toyota Yaris, and I loved the thing. Whatever it is, it has to be reliable. I live in the middle of nowhere (30mi from work) and there is no public transportation here. I want to move closer, but I don't have the money to move yet.
My details: I'm in Ohio, female, and over 25, if it matters.
Credit Karma says my score is 750.
In the bank: $4,000
Monthly disposable income (after tax, all insurance, utilities, groceries, etc. This is going to go down a little due to a new phone and car insurance plan, and of course, the new car payment.): ~$800
Totalled Car Payout: $7,600
I will probably get a little more in insurance money, but not much. I don't know amounts yet.
Credit Card Debt: $4,500 (I usually buy everything on CC, then pay it off monthly. No interest. 2021 messed me up, and I was digging myself out of debt. Would have paid it off %100 before the December payment was due and started building my emergency/moving funds again, but the accident ruined that.)
Dad's Opinion: Buy a new car such as a Kia Rio S or Toyota Corolla. It'll have a warranty, it will be reliable for many years to come, and have good resale value. Prices around me seem to be around $22-23 thousand. $20 if I'm very lucky, but I don't have the time to wait for 20. Use the full $7,600 as a down payment.
My Opinion: Buy a used certified car, which has a 7 year, 100,000mi warranty. Stay under 50,000 miles, one owner, and no accidents on record. That would be around $16-18 thousand. Combine my savings and the car payout ($11,600) to pay off the CC debt entirely, save $1,000 for emergencies, then dump the remaining $6,100 into a down payment for the used car.
What do you think? This whole thing makes me nervous, so any extra thoughts and opinions would help.
Edit. Sorry about the awkward spacing. I'm on mobile and it doesn't seem to want to work.
Edit 2. Thank you for all the responses! New won by a landslide and the reasoning is sound, so that's what I'll do. I'm still miffed I'm going to have a car payment again when I was so close to being debt free, but such is life. Thanks again for all the advice!