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Message
Is buying a used car with a student loan a good idea?
Posted on 7/10/11 at 3:16 pm
Posted on 7/10/11 at 3:16 pm
I already have a truck (paid off), but driving it back and forth to LSU every day is killing me between fuel and maintenance. I would like another vehicle so I don't have to drive my truck every day.
I have a family member who is getting ready to sell a small car for about $8k. Is it wise to use a student loan to buy the car, or should I look into doing it another way? I've already checked, and I can afford the insurance on both the car and the truck, so that isn't a problem.
I'm a complete idiot about finances. I'm one of those people who pays cash for everything and I have zero credit because of it. I'm thinking a student loan may not be a bad way to help my credit as well as saving me from driving this big arse truck through baton rouge every day.
So am I an idiot or what? TIA
I have a family member who is getting ready to sell a small car for about $8k. Is it wise to use a student loan to buy the car, or should I look into doing it another way? I've already checked, and I can afford the insurance on both the car and the truck, so that isn't a problem.
I'm a complete idiot about finances. I'm one of those people who pays cash for everything and I have zero credit because of it. I'm thinking a student loan may not be a bad way to help my credit as well as saving me from driving this big arse truck through baton rouge every day.
So am I an idiot or what? TIA
5
Posted on 7/10/11 at 3:25 pm to DownshiftAndFloorIt
sell your truck and buy the car cash
Posted on 7/10/11 at 3:27 pm to Gutterman81
quote:
sell your truck and buy the car cash
THIS
Don't put yourself in any more debt than you have to.
Also, you would now be paying insurance, maintenance, etc... On two vehicles. Definitely not worth it.
This post was edited on 7/10/11 at 3:29 pm
Posted on 7/10/11 at 3:33 pm to DownshiftAndFloorIt
quote:
I already have a truck (paid off), but driving it back and forth to LSU every day is killing me between fuel and maintenance.
Fuel and maintenance are cheaper in the long run vs. having a car note.
However, if your truck is worth more than $8K, sell it and buy the small car.
Posted on 7/10/11 at 3:41 pm to Will Cover
The most I could get for my truck would be about 4k. It's a 94 with alot of miles. I have to have a truck because I work on a farm, so being without a truck is not an option. I wouldn't put hardly any miles on it though if I had a car, so the maintenance on it should go down to almost nothing. I'm also thinking in the long term here, because once I get out of school a car would save me from having to drive this rig to wherever I get a job.
ETA: Is an $8k student loan considered a big loan? 40mpg vs 12mpg would seem to add up considerably in the long run considering I drive 400 miles a week.
ETA: Is an $8k student loan considered a big loan? 40mpg vs 12mpg would seem to add up considerably in the long run considering I drive 400 miles a week.
This post was edited on 7/10/11 at 3:43 pm
Posted on 7/10/11 at 3:42 pm to DownshiftAndFloorIt
quote:
The most I could get for my truck would be about 4k. It's a 94 with alot of miles. I have to have a truck because I work on a farm, so being without a truck is not an option. I wouldn't put hardly any miles on it though if I had a car, so the maintenance on it should go down to almost nothing. I'm also thinking in the long term here, because once I get out of school a car would save me from having to drive this rig to wherever I get a job.
ETA: Is an $8k student loan considered a big loan? 40mpg vs 12mpg would seem to add up considerably in the long run.
Sounds like you have you mind made up, buy the car with student loans...
Posted on 7/10/11 at 3:44 pm to Gutterman81
quote:
Sounds like you have you mind made up
Not hardly. I'm a financial idiot. I'd have to swap jobs if I didn't have a truck.
Posted on 7/10/11 at 3:45 pm to Gutterman81
quote:
I have to have a truck because I work on a farm,
are you compensated for using your truck on the farm?
Posted on 7/10/11 at 3:47 pm to Gutterman81
quote:
are you compensated for using your truck on the farm
Yes. I make a little more per hour and anything that gets messed up at work gets paid for by the boss man.
Posted on 7/10/11 at 3:48 pm to DownshiftAndFloorIt
quote:
Yes. I make a little more per hour
So other people who work with you dont use their trucks and make less?
Where is all the money you make going?
This post was edited on 7/10/11 at 3:49 pm
Posted on 7/10/11 at 3:50 pm to Gutterman81
what kind of car you buying that gets 40mpg...and what kind are you driving getting 12mpg....i think those numbers are skewed. prolly more like 16 and 32
Posted on 7/10/11 at 3:54 pm to Gutterman81
quote:
So other people who work with you dont use their trucks and make less
No. I'm the only one who works there. It's a small operation. They pay me very well though.
quote:
Where is all the money you make going
Most of it in the bank to pay for school. The rest goes to fuel and maintenance on my truck.
The car is a mitsubishi lancer 4 banger with a 5 spd stick. According to the little in dash fuel economy thingy, it gets 40 mpg. I'm not sure of the accuracy of that thing.
My truck is nasty and really gets 12 mpg. I bought it because my last truck blew up and I had to have one that week. Boss was selling his and gave me a very good deal on it.
Posted on 7/10/11 at 4:39 pm to DownshiftAndFloorIt
I bought a boat with a student loan when I was in school, so I say sure, buy the car. 
Posted on 7/10/11 at 4:56 pm to El Josey Wales
quote:
El Josey Wales
Oh. Well in that case, I'll buy two cars and a new truck
Posted on 7/10/11 at 5:06 pm to Will Cover
quote:
Fuel and maintenance are cheaper in the long run vs. having a car note.
This.
Also, the insurance on the truck should be cheaper.
I would drive that truck into the ground.
Posted on 7/10/11 at 5:14 pm to DownshiftAndFloorIt
Is a mitsubishi lancer even worth 8k new? Seriously though why not get an older corolla for 2500 or get a late 90's camry for 5k? They both get great gas mileage and would cost thousands less. It seems like you just want this car, nothing wrong with that, but you can make some dumb financial moves when you really want something, not need. Have you checked on getting this student loan already? I know when I was in school there were limits on how much you could get..
Posted on 7/10/11 at 5:20 pm to DownshiftAndFloorIt
Interest rate is 6.8%, that's pretty shitty. Though, if it's subsidized, it's interest free until 6 months after you graduate.
Posted on 7/10/11 at 5:24 pm to Rebman601
I really wasn't thinking about buying anything until today when I found out they were selling it. I'm more concerned with the stupidness of the idea of using a student loan to purchase a car, not necessarily that one. It looks like everyone thinks it's not a good idea though, so I'll probably pass on it.
Posted on 7/10/11 at 6:26 pm to DownshiftAndFloorIt
12 is very believable for an ol truck. I have an '07 and I get 14-15 in the city. Add on a 4x4 package and a bigger engine and he might be making less than 12.
Posted on 7/10/11 at 6:27 pm to DownshiftAndFloorIt
FWIW, I don't see a problem with your idea. Seems to make sense.
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