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Overwhelmed First-time car buyer, unique circumstance.
Rand0_Slim
Member Posts: 8
Hello, I apologize for what is probably the millionth topic like this. I am 29 and have never owned or purchased a car due to eyesight problems. Now though, some things have changed and I have the required 20/40 or better eyesight, suddenly I'm allowed to drive. I never really had to plan my life to accomodate a car and can't afford much. I make an embarrassing 41k per year and don't have much disposable income, I currently spend roughly $250 per month to use Uber to get to work or other places that using a bus costs too much of my time. I've done a lot of reading already and know that if say I could come up with a $1000 or $1500 down payment I could "afford" a car with a sticker price in the $7500-10k range. I'm just gonna guess insurance will be $75-$100 more per month. Assuming I'd never need Uber again, I could handle total TCO in the $250-$300/month range at most. Theres a few used cars in that range that still might have some warranty left. I know to avoid Euro cars because of repair costs, and everyone tells me Korean cars are crap. The common advice in my situation is to just buy some boring toyota/honda for cash and run it into the ground, right? Here's some variables I'm struggling with though:
1: I probably won't be putting a ton of miles on a car, I won't be the person putting 20k or more miles per year on it.
2: I know nothing about fixing cars. Sure, I'll read the manual and stuff but I have no tools or space to do the work.
3: I'm terrified of 3 or 4 digit sudden repair bills that could come from a heavily used beater car.
4: I don't have the cash reserve to just drop like 3-4k in cash outright for said beater car in the first place, I'm still working on just having an emergency fund to cover 3 months rent/food/utilities and contributing to a retirement fund.
5: I'm newish to the area I live in and don't have any trusted mechanic friends or like some guy that fixes up cars reliably and flips them.
It just feels like no matter what I choose it's a complete gamble. Buying new you run the risk of ending up in an "underwater" or "upside down" loan where you get trapped in a never ending cycle of a 6 year loan you can never pay off. Even if you do, you now own a car that is nothing but a ticking time bomb and all you've gained is the right to pay for expensive repairs out of your own pocket and you have to hope that whatever repairs you have had to do on it cost less than the trade-in value. Buying used has all of these problems also but you probably get no warranty right from the start on top of it and you have to squirrel money away to prepare for repair bills. Leasing denies you even the chance of having future trade-in value and I'm assuming they find every excuse possible to charge you for "excess wear and tear" fees just like how apartments find every excuse to steal your security deposit.
So assuming I'm too poor to even consider buying new, what the heck is even the difference between having low monthly payments on a lease but no worries and therefore a little disposable income that could go elsewhere versus buying heavily used and having to put the money I saved away just so I can blow it later anyway when the transmission craps out or whatever? Seems like in the end all you can do is make sacrifices to the Great Machine God in the Sky and hope your car magically has no problems. I get it, people say leasing is stupid financially.....but I mean.... you can't take any of it with you when you die, and if leasing allows you to put money elsewhere in your life that can bring back a good rate of return due to the low monthly payments.....is it really that bad? Maybe I'm just paranoid about used cars more than I should be, I really don't know. But if I get unlucky on my first used car and it's a lemon.......it could ruin my life for a good 2-3 years. It just seems to me all the people who go the equity route end up constantly paying on a new car anyway and don't get much if any time to be "free and clear" because most cars are designed to fail right around or before the time you are done paying for it, and even with the trade-in value factored in to each purchase they still end up paying as much or more per month than with a lease unless they downgrade. Anyway, sorry this is long......but yea I need some help. I know a guy at the gym who works at a dealership I could ask, but I assume his incentive is to take advantage of me.
1: I probably won't be putting a ton of miles on a car, I won't be the person putting 20k or more miles per year on it.
2: I know nothing about fixing cars. Sure, I'll read the manual and stuff but I have no tools or space to do the work.
3: I'm terrified of 3 or 4 digit sudden repair bills that could come from a heavily used beater car.
4: I don't have the cash reserve to just drop like 3-4k in cash outright for said beater car in the first place, I'm still working on just having an emergency fund to cover 3 months rent/food/utilities and contributing to a retirement fund.
5: I'm newish to the area I live in and don't have any trusted mechanic friends or like some guy that fixes up cars reliably and flips them.
It just feels like no matter what I choose it's a complete gamble. Buying new you run the risk of ending up in an "underwater" or "upside down" loan where you get trapped in a never ending cycle of a 6 year loan you can never pay off. Even if you do, you now own a car that is nothing but a ticking time bomb and all you've gained is the right to pay for expensive repairs out of your own pocket and you have to hope that whatever repairs you have had to do on it cost less than the trade-in value. Buying used has all of these problems also but you probably get no warranty right from the start on top of it and you have to squirrel money away to prepare for repair bills. Leasing denies you even the chance of having future trade-in value and I'm assuming they find every excuse possible to charge you for "excess wear and tear" fees just like how apartments find every excuse to steal your security deposit.
So assuming I'm too poor to even consider buying new, what the heck is even the difference between having low monthly payments on a lease but no worries and therefore a little disposable income that could go elsewhere versus buying heavily used and having to put the money I saved away just so I can blow it later anyway when the transmission craps out or whatever? Seems like in the end all you can do is make sacrifices to the Great Machine God in the Sky and hope your car magically has no problems. I get it, people say leasing is stupid financially.....but I mean.... you can't take any of it with you when you die, and if leasing allows you to put money elsewhere in your life that can bring back a good rate of return due to the low monthly payments.....is it really that bad? Maybe I'm just paranoid about used cars more than I should be, I really don't know. But if I get unlucky on my first used car and it's a lemon.......it could ruin my life for a good 2-3 years. It just seems to me all the people who go the equity route end up constantly paying on a new car anyway and don't get much if any time to be "free and clear" because most cars are designed to fail right around or before the time you are done paying for it, and even with the trade-in value factored in to each purchase they still end up paying as much or more per month than with a lease unless they downgrade. Anyway, sorry this is long......but yea I need some help. I know a guy at the gym who works at a dealership I could ask, but I assume his incentive is to take advantage of me.
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You are right to be concerned about what path to take. Buy used and risk constant (and possibly expensive) repairs. Buy new and commit to a big payment.
I see that you are in Utah - I'll assume you are in SLC, given your use of Uber to get around currently.
A few questions to help us:
1. Is $250 your total monthly budget, including the loan payment, insurance, gas, parking costs, maintenance and repairs?
2. How many miles would you be driving, each month?
There are advantages to both buy and keep versus leasing. I have one vehicle financed each way in my household - wife's Subaru is financed for 6 years (with some negative equity rolled in, so I understand your concerns), while my VW is leased for a pretty low payment ($225/mo, and another $75/mo for insurance in suburban Denver).
I'll get some of our regular posters to join this thread and offer their opinions, but the answers to the above questions will help us help you.
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2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4
IMO, buying a cheap used car, is an art form. Especially if you are going to have to take a loan out on it, so you don't get the cost certainty advantage of having a new car. And it is really helpful if you know cars and can either do things yourself, or understand what you are talking about if having to take it in for repairs. And cheap cars are going to need more of them.
reading all this, I actually think a cheap lease is your best bet if you can swing it (and qualify). Only way to really get into a car with the little you have to put down, and actually have cost certainty. No, you won't have equity at the end, but if you get a cheap old car, in 3 years, it won't be worth that much anyway plus you will have put money into it most likely.
the trick is getting a lease in the $200/mo payment range. Not easy, won't be fancy, but it is a great way to get started. In 3 years, hopefully you have saved a little more, making more, etc. If you did find a car for $7.500, and put down $1,000, you would be paying $200/month on it for 3 years anyway.
anyway, I feel for you. Getting started is tough, and expensive!
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
http://www.columbiahyundai.com/VehicleSearchResults?search=new&make=hyundai&model=accent&cs:e=g&cs:gn=s&cs:cid=295735545756&cs:kw=hyundai accent lease&cs:p=&cs:tv=3657&cs:a=df_univ_retention_search&cs:pro=mltunidfdap&cs:ki=1442457994&gclid=EAIaIQobChMIqJeGmPWY3gIVCSaGCh3jXgocEAAYASAAEgLwPPD_BwE
https://www.southdadetoyota.com/0-down-lease-deals-toyota-yaris
https://www.hirlingerchevrolet.com/VehicleSearchResults?search=new&make=Chevrolet&cs:e=g&cs:gn=s&cs:cid=281271461973&cs:kw=+chevy +lease&cs:p=true&cs:tv=3746&cs:a=chevntlretnknwc_chevrolet_make_lease_loc_reach&cs:pro=chevntlretnknwc&cs:ki=1423943257&gclid=EAIaIQobChMI5Iea1_aY3gIVkluGCh1qDwwLEAAYAyAAEgIUt_D_BwE&model=Spark
But if are going to get a car in spite of that, here's a site that's good for looking at some prices for used cars:
https://www.cars.com/
Program in your zip code, budget, desired equipment, etc. and see what comes up in your area.
But you might also consider trying to swing a lease on something like a new Elantra, which Hyundai has an offer for of c.180 a month + taxes etc., but that's with a downpayment of $2000:
https://www.hyundaiusa.com/financial-tools/special-offers.aspx
Finally, probably not possible, but by any chance Is there a relative or family member who would be willing to sell or loan you one of their old cars for a really good price, or even free?
If you are covering all of your transportation expenses on $250/mo, then just keep going that way.
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The problem with uber is if I want to go anywhere else, out for a drink, to the comedy club, a ball game, a date, or to the start of a trailhead to hike, THEN using Uber for all that could easily be like $400 or more per month......so mostly I do nothing and stay home, I order all my groceries online so I never have to go to the store. I would pay nothing for parking at my apartment or at work. I don't think I'll put a ton of miles on a car really, work would only eat up like 8 miles a day, so assuming I wanna go out more.......maybe lets call it 400 miles a month maybe 500 at most, really depends how comfortable I start to feel on the freeway as people drive extremely stupidly on I-15, the Utah/bad driver stereotypes are quite true from an outsiders perspective (I'm from Illinois where Chicago drivers are crazy but at least skilled). Hell, I might start driving for Uber a little at peak times to offset some costs.
I'm fine with saving up for a bit bigger of a down-payment since I'm not gonna buy until 2019 anyway. I actually just got an 1100 dollar performance bonus at work so I could wait till the $2000 mark for sure. My credit score is like middle 600s if that helps also. A car I had my eye on is a Prius-C, I like the hatchback look more so than the sedan version, with as few miles as I would put on it, gas would be almost negligible for me. This leads me to probably a really stupid question: can you lease cars that aren't from the current model year?
Short answers to other questions: nope, know nothing about fixing cars, have no tools to use, my experience with cars is through video games as sad as that is. I have no family in Utah and so far no friends either (its a hard place to make friends even if you are friendly). I'm well aware it helps to "know a guy", but I just don't so far, I could try asking around at work and the gym I suppose.
Insurance? Even the most basic insurance has got to be maybe...what?....$40 a month?
Let's say this old car turns out to be pretty good, so maintenance and repairs (expendable items) maybe...two oil changes a year, wiper blades, let's say two tires, washer fluid, a few car washes, some brake pads in front.....so let's call that another $40 per month.
So TCO per month is going to be, in the best case, $155 per month.
Then plates and registration, so another $15.
OK, $170 per month minus the $300 you have = $130 per month to buy or lease a car.
Doesn't look good. If you went to a budget of $400 per month, that leaves you $230 a month--so that's a real squeaker on a lease.
If you took out a 3-year loan for $230 a month to purchase a car that's a loan of around $7800. Not too bad to buy a used car.
given your relatively low expected usage, less risk with a used car than if you were depending on it for a lot of long trips.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Usually you can only lease new cars.
If you can pay $5000-$7000 cash for a used car, then you might be able to skip collision and comprehensive insurance, and possibly drop your insurance budget to around $50/mo. (of course, you are at risk for the $5000-$7000 vehicle value).
...so mostly I do nothing and stay home,
This is a values choice... it's easy to fall into this, when you are single. IMO, the money you save by doing this is just not worth it. When I was 30, I was single, owned my own home and a Porsche. But, I spent a lot of time pinching pennies to make it happen. I would have been better off without the Porsche and a bigger entertainment budget. (and, my social life would have been better).
So, don't wait to get a car, or worry about the extra $100/mo. for Uber.. Get out there and live a little.
Wait, is that car advice?
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Ideally, if I could find something fun to drive that's not the exact same cookie cutter Civic/Corolla/Accord that seemingly everyone has that would be cool. All-wheel drive would be nice given where I live too but even just that small list seems unlikely in my range. Don't want a truck or SUV really either. Good news is this site has manufacture specific forums so I can do research on individual models to learn what parts to expect to replace and what brands/models last the longest.
One other thing I just thought of: Are certified pre-owned cars actually trustworthy enough to not bother taking it to a mechanic? Given that I don't know anyone to trust or anything useful about cars......it seems like a waste of 100 bucks to me in theory to do that.
here are a couple of random ones in NJ in your price range (top and bottom end)
http://www.royaleasing.com/detail-2012-honda-accord_sedan-4dr_i4_automatic_lx_premium-used-18024502.html
http://www.royaleasing.com/detail-2012-honda-accord_sedan-4dr_i4_automatic_lx_premium-used-18024502.html
this one is a pretty good mix of price, age, equipment and miles.
https://www.royalautogroups.com/vehicle-details/2011-chevrolet-malibu-lt-alloy-wheels-conv-pkg-sunroof-silver-certified-sedan-26a01b592ac1354ebe1cd890ff81fce0
slightly over budget, but much newer lower miles. should last a long time and be cheap to own.
https://www.royalautogroups.com/vehicle-details/2014-nissan-versa-sv-alloy-bluetooth-conv-pkg---silver-certified-sedan-bf064e0a2dac7340b5685491591be843
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Carvana is a relatively new company that also checks out its used cars before it sells them....
https://www.carvana.com/cars
You shop online with Carvana, and they will deliver a car to you....
https://www.carvana.com/search/2000178643/2012-nissan-sl-hatchback-4d-
But just to say the obvious, it will be important to figure out if when all costs (including insurance, etc) are figured in whether it makes sense for you.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Still though, I appreciate the replies, and I do feel more comfortable with the math of my budget and some of the options I didn't realize were available to me. I'm a pretty thorough consumer though so I won't rush (I mean hey I've already gone my whole life pretty much without one so whats another 6 or 8 months?).
https://www.cars.com/vehicledetail/detail/752862001/overview/
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
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2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4
https://www.strongvw.com/vehicle-details/used-2010-chevrolet-hhr-lt-salt-lake-city-ut-id-25919457
For this price apparently you have to finance with the dealer, which seems a bit questionable. And so there seems to be a different "cash price" that you have to request. But they do say that for used cars they provide a "lifetime" powertrain warranty for cars with less than 100k miles, which this one just barely qualifies for.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.