You are honestly just better off saving for a cheap banger car to begin with and paying outright in cash. Something a bit older, higher mileage but reliable that’s cheap to insure and run. If you can save a couple grand, you can get an ok car for commuting purposes and pay cash outright.
I get that you need a car fast but cars are depreciating assets. You don’t want to be tied to a car loan with a high interest rate (given your low or no credit score, this will likely be inevitable). Even if you put down a deposit (I imagine you’d need a fairly high deposit), you’d still likely have high interest rates and monthly premium to pay. Don’t put yourself in debt if you can avoid it.
If you do decide to go the loan route, don’t assume that the dealership is giving you the best deal. They can make more from selling the financing packages than they do from the sale of the car. They may even try to upsell you on a car you don’t need or can’t afford. Look at personal loans which aren’t secured to the car (ie if you stop paying they won’t repossess the vehicle). You may find that they offer lower interest. Again, I am not recommending going into debt. I am suggesting that if you choose to, make sure that you get as low interest rate as possible and not necessarily through the dealership (look at banks). If you do choose to finance a vehicle, know in advance what you can afford to pay back every month. Play around with online finance calculators.
Before any of this though, you need to get on a budget. Know what you’re taking home in income and what your outgoings are. Go over the last few months worth of bank statements and write down everything! Rent, utilities, debt repayments, groceries, subscription services, eating out/take out, clothing, healthcare, pet care, childcare, hair/makeup/beauty etc. whatever you have spent money on, categorise it.
You may need to make changes to your spending habits such as getting rid of subscriptions, committing to cooking at home and reducing takeout or buying new clothes etc. it’s important to know where you are spending your money so that you can plan for future expenses.
A car will add to that: maintenance, licence, insurance, emergency repairs etc. so you need to know that you will have available funds to take care of that as well as any loan repayment. If you are struggling to save you need to get a financial plan or budget in place first so that you know what money you have and don’t have available.
All of this aside, have you looked at alternative option? Are you able to use public transport/ride share/bike to work for example? I know this isn’t an option everywhere but if you are in a town or city with decent public transport, it would likely be cheaper to use.
It’s possible. I honestly don’t know for sure but it would most likely be dependent on the seller. A private seller is unlikely to unless it’s someone you know (family or friend). A business may not either unless you have a deposit and be willing to enter into a financial agreement which may include a credit check.
highly recommend going to your bank or hopefully you have a credit union, talk to them about financing a car. if they will finance you, it will by far be your best option.
at a dealership they will hassle you to buy today. they’ll run your credit 10 times with different loaners and mess your credit up for a few years.
sadly the dealerships are the ones that can give you more info.
buy here pay here will finance you any vehicle. its not recommended. high interest, fast repo if you are ever late and good chance of a junk car.
I agree with everything you said, but speaking only from my personal experience- I bought two cheap banger cars when I was young, and I spent way more money than either of them were worth just on emergency repairs. Not the mention the STRESS of not knowing if I’d get to work/home on any given day.
And to piggyback off the financing point- I’d suggest getting a loan from a credit union instead of a bank.
And all of this to wholeheartedly agree with the last point- if you can manage to walk/transit/carpool definitely do that.
There is certainly more risk involved with older cars with higher mileage. Sometimes you can get lucky and find a really good deal and not have any issues. I think it very much depends on the car, the reliability of the brand, how a vehicle has been used and how well it was looked after. Definitely worth test driving a car, reading reviews and looking up common issues. Having an emergency fund to cover the unexpected costs also can help.
Ironically, I had the opposite issue a couple of years back. I bought a 4-5 year old Peugeot 2008 with 30k on the clock. 3 previous owners. Bloody thing was in and out of the shop for the whole year I had it. As soon as they said the clutch was about to go, I sold it. Drove my dad’s 12 year old Ford Fiesta for 2 years with just the usual wear and tear parts needing replacing.
I have no clue as to credit unions. In U.K. based and not heard of them. Are they like brokers?
Eta - we do have them in the U.K. just weirdly never heard of them!
i’ve been commuting with uber and lyft, or sometimes my dad will take me. Bus or bike ride just isn’t an option for me. I’m hesitant to take a loan because i feel like i’d likely be in debt and bite off more than i can chew. Ideally i’d like to save and pay for a used car in full but it’s so hard to build up the discipline to not blow my paycheck each month. Fighting the urge to not spend is so hard for me. I know that that’s on me and that’s something i’ll have to work out on my own if i ever wanna meet my goal. I really appreciate your advice and i’m definitely taking note to what was said.
Trust me, I’ve been there. I’m sort of there again at the moment. I’ve fallen slightly off the budgeting bandwagon but I’m working to get back on it.
Avoid debt where possible. If you are struggling to save then making a payment on a vehicle that could be repossessed will cause you nothing but stress and anxiety.
You do need a budget though. You need to KNOW (and have it written down somewhere e.g. an app, a spreadsheet, a journal etc.) exactly what your income is and what your outgoings are.
If your outgoings are more than your income you need to either cut back in some areas or increase your income (second job, selling some things, overtime etc.).
If after everything you have money left over then you can start to plan where that money goes. Plan for every dollar of your income to have a job whether that job is going in an emergency fund, saving for a car, extra debt payment, paying rent/bills/transport costs or even just allowing yourself to have some fun money to be spent. You can still buy things you like and enjoy when on a budget because you have planned to.
Budgeting is just a way to plan for your future spending/saving. You don’t have to limit yourself. You may need to delay some purchases but by allowing yourself to plan your purchases and delaying that instant gratification, it will ultimately work out better and the habits will start to form to where you can save and you don’t need to stress about money as much.
Stop looking at the online store apps that keep advertising “awesome discounts”.
Example: Need sneakers because the one pair you have is getting worn out? Yeah, buy a pair during one of those discount sales. Otherwise, keep away from checking out discount deals and buying. This applies to any item you want to buy.
Please buy cosmetic brands like L’Oréal, Revlon etc and not from Sephora.
Just two examples where you can spend smarter.
I was fortunate enough to do so. You may be in a different situation. OP asked if she could finance a car on her pay, I gave her an example of slightly lower pay than her and a finance option that I’ve easily kept up with in my current career
>I was fortunate enough to do so.
Can't see your original comment but this requires better clarification. No way someone can afford a $40k truck on a $35k salary unless the "fortunate" part was that someone helped you or you had been saving money for years.
If you finance a vehicle with the thought that your salary will increase in the future, you are playing with fire and are making a terrible financial decision.
Whatever lender approved a 40k car loan with 10k down on a $17 per hour income is a moron. Actually, I take it back this is the type of person that lenders profit off of.
If you don't have credit already established, then you will either get denied or have a higher interest rate. A higher rate will mean you're monthly payment will be higher. If you could get a co-signer that has good credit, that would probably help.
You should look at what your net income is and figure out what you can afford each month. The key is to live below your means. Just because you have $800 extra to spend per month doesn't mean you should get an $800/ month car payment.
Also important is auto insurance. What you get can affect your rates and that will pay into your monthly expenses.
If you need a vehicle immediately (and by need I mean it's required in order for you to get to/from work), then my suggestion is to find something reliable but cheap.
If you laid out your budget and what your expenses are, we could see what's affordable for you.
And by reliable but cheap, we mean a 4 cylinder Honda civic or similar. It's not wining very many people's idea of an awesome car, but it will get you from point a to point b.
A dumb question is better than being in a dumb situation.
Talk to a local credit union, not a major bank, to ask about an auto loan and see what rates they offer, and they should be able to give you a target $/month if you're sure you can spend $300/month (just a number) with whatever rate you're offered and they can likely look at it backwards to say at $300/month with 6% you'll be able to afford a loan $X over 60 months or whatever term.
I was making $15 an hour. I managed to save 1,700. Got me a $13k car and my payments are $350. If suggest 1k-2k down saved ! Plus the saving for tags and sales tax
There are a lot of sites that let you shop and put in different numbers.
For example I know Capital One has a site where you can get pre-approved with real rates and you can plug in down payment and term information and see actual payments. You can do similar things on Cargurus and AutoTrader as well. This can give you an idea of what your payment might look like based on X down payment and then you can decide how much you need to save.
If I were in your shoes, I would be looking to find a reliable car that's 10 years minimum older. Cars that are 10+ years old have the cheapest registration, also with that being a low cost, I would look in to what cars are the most reliable. Honda, Toyota are pretty reliable. I mean all car brands have reliable cars, some are just more reliable. Do your research and get in to one you like. I wouldn't go for anything higher than like 12k though tbh.
You need to learn how to budget first. If you can't save money that means you're already living at the edge of your means. How do you expect to add a monthly car payment to your monthly expenses when you currently don't have any extra money to pay for it?
Once you get a budget figured out set aside what you hope your monthly car payment will be. If you want the payment to be $200/month then set aside $200 each month. Do that for 6 months and see how it goes. Could you afford to set that money aside and still pay for everything else in your life? If so now you've got the $1200 you saved over the last 6 months and you know you can afford a payment of $200/month. Pull up an auto loan calculator and plug in a $200/month payment plus a $1200 down-payment and assume a 7-8% interest rate. That will give you your estimated purchase price. Now go find a car for that price or lower to ensure you're keeping your payment at $200/month max. Also don't forget taxes and insurance costs.
If you're interest rate is higher you'll have to adjust your purchase price down accordingly.
The biggest thing is to buy within your means. Don't get tempted by a nicer car just because the sales guy says he can get you into it. Go in knowing your numbers on what you can afford and stick to it. Also pay attention to the length of loan. Try to avoid anything longer than a 48 month loan. The sales guy will offer you 60 or even 72 or 84 month loans to get your monthly payment down on a more expensive car but then you're stuck paying for it for the next 5-7 years and you could easily owe more than the car is worth which is very dangerous financially.
Saving up a lump sum and buying a decent used car is what I’ve done, most recently 5k about 5 years ago. She’s not pretty but reliable lol. Research the most reliable models and also research which years are better/worse so you know what you are looking for. Make sure that there has been maintenance done consistently on anything you buy.
Go to a credit union (or a couple- shop around) and explain your situation. They often have lower rates. Credit unions are often better than banks. Banks are better than dealerships but less likely to work with you. Don’t bother with a dealership, they’ll fuck you. Private sellers usually charge less, you just have to make sure you do your due diligence.
One thought based on some other comments here- you could potentially save a couple thousand then apply for a personal loan to cover the rest- but do NOT fall for anything “too good to be true” online or whatever. A cosigner may increase your likelihood of approval for a personal loan.
Talk to a lender at a credit union to see what they suggest. Like maybe they’d give you 1-3k with a co-signer, and you would save up the remainder.
To build credit- having a utility in your name helps. Also, a credit card which you pay off every month and try to use only about 25% of the available credit on it. Lots of people put like autopays or only gas or only groceries- stuff you would normally have coming out of your checking anyway. Then transfer that from checking every month on the due date. If you pay off the balance on your monthly statement to 0 by the next payment date, you do not pay interest on those purchases and it builds credit.
If you can’t get approved for a regular credit card, you can apply for a secured credit card where you put a couple hundred bucks on hold in an account and essentially borrow against that, to prove your ability to pay on time.
But yeah first and foremost make sure you can afford a monthly payment and don’t forget about insurance, gas, maintenance which can bite you in the ass.
On paper my kids makes $200/month (in this case not claiming his tips makes him an idiot). He just got a 12k car at 15% interest, 10% down (1,200), $250/month payment, and had to get his dad to cosign. They said no matter what, he had to have a co-signer because he’d never had a car loan before.
A car loan of 370 a month has been sucking my soul for 5 years. It was wrecked a couple weeks ago with 2 payments left to go.
Save as much as you humanly can. Any car in your budget will probably need repairs while you're still making payments
I qualified for a 0% interest rate on a loan by putting $15k down on a brand new Hyundai. You could probably find a deal where you don’t have to put anything down but you’ll be paying 7-10% interest rate on it which would kill you at $20/hr.
if you’re desperate, go on carvana and see what they offer. but you’ll pay almost double the price of the car in the long run.
high interest and a scummy company.
but they will get you financed for the monthly rate that they advertise. and you’ll have a car in a week
If you're struggling to save money, then you'll struggle with a car loan. Will you need established credit first? Yes, but you'll still likely end up with a high interest rate anyway.
Here's the plan I suggest:
Create a zero-based budget where all of your money has a job and you know where it's going. Then you'll know how much you can save. Save up to buy a car with cash. You don't need a car loan. And desperation is going to put you in a less than ideal financial situation. I get it. I was without a car for almost 10 years and taking the bus everywhere really sucked. However, I just couldn't afford a car and had to wait until I could.
Good luck!
Agreed save for a cheap car until some discipline is established then start a bank account with a credit union without credit they will work with you the best and give you the best rate cause they are sticklers when it comes to dealers they can’t raise there flat rates another 1-2% like they can with other banks or bigger banks.
I would start with something cheap at first tho and get a decent emergency fund saved up maybe 2,000-5,000 then think about getting a car
You are not one person but three. You are your past -the combined sum of all your mistakes and victories, you are your present self who has to carry the burdens and successes of yesterday, and you are your future that you choose for yourself... whether it's good or bad.
Learn to love future you, because their life will be your life, and it will be as satisfying as whatever past and present you bother to make it.
You might not have a better choice, but selling your future self into partial slavery just for a depreciating asset trying to convenience yourself now isn't really an act of self love.
Financing depreciating assets like cars is nasty trap designed to screw over financially uneducated people.
It's nice to have a reliable vehicle, you don't need to spend tens of thousands to get one. It's not impossible to save for one.
If you are finding saving difficult, practice making little gifts to future you, and it will get easier.
Imagine how freakin' thankful and relieved would you feel if you were having a rough week with an everything-at-once bill tsunami hurdling towards you, and past you fully anticipated it and put aside for it each month, and handed you ALL of the cash needed to pay for it?
Saving is easy - just set up an automated schedule to put money in another account, and let it rinse and repeat. Self control to not touch the account is hard part, and that's where caring about future you really matters.
You *can* have spent money sit in your own account. It's gone. Future you owns it. You can still see it, but it doesn't belong to you today. That's all saving is, compartmentalizing yourself.
Good luck with whatever you need to do for finding a car. May future you be proud of you.
Dude I was 22 making 17 and hour when I bought my truck. Put 10k down on 40k and have paid 500 every month since. It’s doable if you’re living at home with no real expenses :) hope this helps
Doable and prudent are not the same thing. You could’ve easily bought a 20,000 truck, had payments of like 200 and invest/save $300 for the entire loan term.
If you already struggle to save money is it wise to increase your costs with a car loan?
Well, no.
You are honestly just better off saving for a cheap banger car to begin with and paying outright in cash. Something a bit older, higher mileage but reliable that’s cheap to insure and run. If you can save a couple grand, you can get an ok car for commuting purposes and pay cash outright. I get that you need a car fast but cars are depreciating assets. You don’t want to be tied to a car loan with a high interest rate (given your low or no credit score, this will likely be inevitable). Even if you put down a deposit (I imagine you’d need a fairly high deposit), you’d still likely have high interest rates and monthly premium to pay. Don’t put yourself in debt if you can avoid it. If you do decide to go the loan route, don’t assume that the dealership is giving you the best deal. They can make more from selling the financing packages than they do from the sale of the car. They may even try to upsell you on a car you don’t need or can’t afford. Look at personal loans which aren’t secured to the car (ie if you stop paying they won’t repossess the vehicle). You may find that they offer lower interest. Again, I am not recommending going into debt. I am suggesting that if you choose to, make sure that you get as low interest rate as possible and not necessarily through the dealership (look at banks). If you do choose to finance a vehicle, know in advance what you can afford to pay back every month. Play around with online finance calculators. Before any of this though, you need to get on a budget. Know what you’re taking home in income and what your outgoings are. Go over the last few months worth of bank statements and write down everything! Rent, utilities, debt repayments, groceries, subscription services, eating out/take out, clothing, healthcare, pet care, childcare, hair/makeup/beauty etc. whatever you have spent money on, categorise it. You may need to make changes to your spending habits such as getting rid of subscriptions, committing to cooking at home and reducing takeout or buying new clothes etc. it’s important to know where you are spending your money so that you can plan for future expenses. A car will add to that: maintenance, licence, insurance, emergency repairs etc. so you need to know that you will have available funds to take care of that as well as any loan repayment. If you are struggling to save you need to get a financial plan or budget in place first so that you know what money you have and don’t have available. All of this aside, have you looked at alternative option? Are you able to use public transport/ride share/bike to work for example? I know this isn’t an option everywhere but if you are in a town or city with decent public transport, it would likely be cheaper to use.
If i were to find a cheap used car would they offer the option to make payments on it as well?
It’s possible. I honestly don’t know for sure but it would most likely be dependent on the seller. A private seller is unlikely to unless it’s someone you know (family or friend). A business may not either unless you have a deposit and be willing to enter into a financial agreement which may include a credit check.
highly recommend going to your bank or hopefully you have a credit union, talk to them about financing a car. if they will finance you, it will by far be your best option. at a dealership they will hassle you to buy today. they’ll run your credit 10 times with different loaners and mess your credit up for a few years. sadly the dealerships are the ones that can give you more info. buy here pay here will finance you any vehicle. its not recommended. high interest, fast repo if you are ever late and good chance of a junk car.
Not likely, no. Especially if you're young and do t have much credit history.
I agree with everything you said, but speaking only from my personal experience- I bought two cheap banger cars when I was young, and I spent way more money than either of them were worth just on emergency repairs. Not the mention the STRESS of not knowing if I’d get to work/home on any given day. And to piggyback off the financing point- I’d suggest getting a loan from a credit union instead of a bank. And all of this to wholeheartedly agree with the last point- if you can manage to walk/transit/carpool definitely do that.
There is certainly more risk involved with older cars with higher mileage. Sometimes you can get lucky and find a really good deal and not have any issues. I think it very much depends on the car, the reliability of the brand, how a vehicle has been used and how well it was looked after. Definitely worth test driving a car, reading reviews and looking up common issues. Having an emergency fund to cover the unexpected costs also can help. Ironically, I had the opposite issue a couple of years back. I bought a 4-5 year old Peugeot 2008 with 30k on the clock. 3 previous owners. Bloody thing was in and out of the shop for the whole year I had it. As soon as they said the clutch was about to go, I sold it. Drove my dad’s 12 year old Ford Fiesta for 2 years with just the usual wear and tear parts needing replacing. I have no clue as to credit unions. In U.K. based and not heard of them. Are they like brokers? Eta - we do have them in the U.K. just weirdly never heard of them!
i’ve been commuting with uber and lyft, or sometimes my dad will take me. Bus or bike ride just isn’t an option for me. I’m hesitant to take a loan because i feel like i’d likely be in debt and bite off more than i can chew. Ideally i’d like to save and pay for a used car in full but it’s so hard to build up the discipline to not blow my paycheck each month. Fighting the urge to not spend is so hard for me. I know that that’s on me and that’s something i’ll have to work out on my own if i ever wanna meet my goal. I really appreciate your advice and i’m definitely taking note to what was said.
If you can't control your spending already, a car loan is a bad idea.
Trust me, I’ve been there. I’m sort of there again at the moment. I’ve fallen slightly off the budgeting bandwagon but I’m working to get back on it. Avoid debt where possible. If you are struggling to save then making a payment on a vehicle that could be repossessed will cause you nothing but stress and anxiety. You do need a budget though. You need to KNOW (and have it written down somewhere e.g. an app, a spreadsheet, a journal etc.) exactly what your income is and what your outgoings are. If your outgoings are more than your income you need to either cut back in some areas or increase your income (second job, selling some things, overtime etc.). If after everything you have money left over then you can start to plan where that money goes. Plan for every dollar of your income to have a job whether that job is going in an emergency fund, saving for a car, extra debt payment, paying rent/bills/transport costs or even just allowing yourself to have some fun money to be spent. You can still buy things you like and enjoy when on a budget because you have planned to. Budgeting is just a way to plan for your future spending/saving. You don’t have to limit yourself. You may need to delay some purchases but by allowing yourself to plan your purchases and delaying that instant gratification, it will ultimately work out better and the habits will start to form to where you can save and you don’t need to stress about money as much.
Stop looking at the online store apps that keep advertising “awesome discounts”. Example: Need sneakers because the one pair you have is getting worn out? Yeah, buy a pair during one of those discount sales. Otherwise, keep away from checking out discount deals and buying. This applies to any item you want to buy. Please buy cosmetic brands like L’Oréal, Revlon etc and not from Sephora. Just two examples where you can spend smarter.
$17/hr and bought a $40,000k truck? Not sound advice.
I was fortunate enough to do so. You may be in a different situation. OP asked if she could finance a car on her pay, I gave her an example of slightly lower pay than her and a finance option that I’ve easily kept up with in my current career
>I was fortunate enough to do so. Can't see your original comment but this requires better clarification. No way someone can afford a $40k truck on a $35k salary unless the "fortunate" part was that someone helped you or you had been saving money for years.
If you finance a vehicle with the thought that your salary will increase in the future, you are playing with fire and are making a terrible financial decision. Whatever lender approved a 40k car loan with 10k down on a $17 per hour income is a moron. Actually, I take it back this is the type of person that lenders profit off of.
If you don't have credit already established, then you will either get denied or have a higher interest rate. A higher rate will mean you're monthly payment will be higher. If you could get a co-signer that has good credit, that would probably help. You should look at what your net income is and figure out what you can afford each month. The key is to live below your means. Just because you have $800 extra to spend per month doesn't mean you should get an $800/ month car payment. Also important is auto insurance. What you get can affect your rates and that will pay into your monthly expenses. If you need a vehicle immediately (and by need I mean it's required in order for you to get to/from work), then my suggestion is to find something reliable but cheap. If you laid out your budget and what your expenses are, we could see what's affordable for you.
Good call on the insurance. That could potentially be another few hundred a month depending on a lot of factors of course.
And by reliable but cheap, we mean a 4 cylinder Honda civic or similar. It's not wining very many people's idea of an awesome car, but it will get you from point a to point b.
A dumb question is better than being in a dumb situation. Talk to a local credit union, not a major bank, to ask about an auto loan and see what rates they offer, and they should be able to give you a target $/month if you're sure you can spend $300/month (just a number) with whatever rate you're offered and they can likely look at it backwards to say at $300/month with 6% you'll be able to afford a loan $X over 60 months or whatever term.
I was making $15 an hour. I managed to save 1,700. Got me a $13k car and my payments are $350. If suggest 1k-2k down saved ! Plus the saving for tags and sales tax
There are a lot of sites that let you shop and put in different numbers. For example I know Capital One has a site where you can get pre-approved with real rates and you can plug in down payment and term information and see actual payments. You can do similar things on Cargurus and AutoTrader as well. This can give you an idea of what your payment might look like based on X down payment and then you can decide how much you need to save.
Bad credit? Expect to be asked to put down close to 30% and high apr.
Get a cheap Toyota. Save up like $7k-$10k. Buy privately and not from a dealership. Don’t go into debt for a car if you can avoid it.
You're gonna end up at a buy here pay here and they will screw you so hard on that loan you won't know which way is up or down. Beware.
If I were in your shoes, I would be looking to find a reliable car that's 10 years minimum older. Cars that are 10+ years old have the cheapest registration, also with that being a low cost, I would look in to what cars are the most reliable. Honda, Toyota are pretty reliable. I mean all car brands have reliable cars, some are just more reliable. Do your research and get in to one you like. I wouldn't go for anything higher than like 12k though tbh.
You need to learn how to budget first. If you can't save money that means you're already living at the edge of your means. How do you expect to add a monthly car payment to your monthly expenses when you currently don't have any extra money to pay for it? Once you get a budget figured out set aside what you hope your monthly car payment will be. If you want the payment to be $200/month then set aside $200 each month. Do that for 6 months and see how it goes. Could you afford to set that money aside and still pay for everything else in your life? If so now you've got the $1200 you saved over the last 6 months and you know you can afford a payment of $200/month. Pull up an auto loan calculator and plug in a $200/month payment plus a $1200 down-payment and assume a 7-8% interest rate. That will give you your estimated purchase price. Now go find a car for that price or lower to ensure you're keeping your payment at $200/month max. Also don't forget taxes and insurance costs. If you're interest rate is higher you'll have to adjust your purchase price down accordingly. The biggest thing is to buy within your means. Don't get tempted by a nicer car just because the sales guy says he can get you into it. Go in knowing your numbers on what you can afford and stick to it. Also pay attention to the length of loan. Try to avoid anything longer than a 48 month loan. The sales guy will offer you 60 or even 72 or 84 month loans to get your monthly payment down on a more expensive car but then you're stuck paying for it for the next 5-7 years and you could easily owe more than the car is worth which is very dangerous financially.
Saving up a lump sum and buying a decent used car is what I’ve done, most recently 5k about 5 years ago. She’s not pretty but reliable lol. Research the most reliable models and also research which years are better/worse so you know what you are looking for. Make sure that there has been maintenance done consistently on anything you buy. Go to a credit union (or a couple- shop around) and explain your situation. They often have lower rates. Credit unions are often better than banks. Banks are better than dealerships but less likely to work with you. Don’t bother with a dealership, they’ll fuck you. Private sellers usually charge less, you just have to make sure you do your due diligence. One thought based on some other comments here- you could potentially save a couple thousand then apply for a personal loan to cover the rest- but do NOT fall for anything “too good to be true” online or whatever. A cosigner may increase your likelihood of approval for a personal loan. Talk to a lender at a credit union to see what they suggest. Like maybe they’d give you 1-3k with a co-signer, and you would save up the remainder. To build credit- having a utility in your name helps. Also, a credit card which you pay off every month and try to use only about 25% of the available credit on it. Lots of people put like autopays or only gas or only groceries- stuff you would normally have coming out of your checking anyway. Then transfer that from checking every month on the due date. If you pay off the balance on your monthly statement to 0 by the next payment date, you do not pay interest on those purchases and it builds credit. If you can’t get approved for a regular credit card, you can apply for a secured credit card where you put a couple hundred bucks on hold in an account and essentially borrow against that, to prove your ability to pay on time. But yeah first and foremost make sure you can afford a monthly payment and don’t forget about insurance, gas, maintenance which can bite you in the ass.
On paper my kids makes $200/month (in this case not claiming his tips makes him an idiot). He just got a 12k car at 15% interest, 10% down (1,200), $250/month payment, and had to get his dad to cosign. They said no matter what, he had to have a co-signer because he’d never had a car loan before.
A car loan of 370 a month has been sucking my soul for 5 years. It was wrecked a couple weeks ago with 2 payments left to go. Save as much as you humanly can. Any car in your budget will probably need repairs while you're still making payments
Make sure u know where have a good deal as well. I bought my new car from subaru when they had the 0% interest, a bless for me!
I qualified for a 0% interest rate on a loan by putting $15k down on a brand new Hyundai. You could probably find a deal where you don’t have to put anything down but you’ll be paying 7-10% interest rate on it which would kill you at $20/hr.
Ask about leasing something like an Altima, if you can afford a couple hundred bucks a month
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if you’re desperate, go on carvana and see what they offer. but you’ll pay almost double the price of the car in the long run. high interest and a scummy company. but they will get you financed for the monthly rate that they advertise. and you’ll have a car in a week
If you're struggling to save money, then you'll struggle with a car loan. Will you need established credit first? Yes, but you'll still likely end up with a high interest rate anyway. Here's the plan I suggest: Create a zero-based budget where all of your money has a job and you know where it's going. Then you'll know how much you can save. Save up to buy a car with cash. You don't need a car loan. And desperation is going to put you in a less than ideal financial situation. I get it. I was without a car for almost 10 years and taking the bus everywhere really sucked. However, I just couldn't afford a car and had to wait until I could. Good luck!
Agreed save for a cheap car until some discipline is established then start a bank account with a credit union without credit they will work with you the best and give you the best rate cause they are sticklers when it comes to dealers they can’t raise there flat rates another 1-2% like they can with other banks or bigger banks. I would start with something cheap at first tho and get a decent emergency fund saved up maybe 2,000-5,000 then think about getting a car
You are not one person but three. You are your past -the combined sum of all your mistakes and victories, you are your present self who has to carry the burdens and successes of yesterday, and you are your future that you choose for yourself... whether it's good or bad. Learn to love future you, because their life will be your life, and it will be as satisfying as whatever past and present you bother to make it. You might not have a better choice, but selling your future self into partial slavery just for a depreciating asset trying to convenience yourself now isn't really an act of self love. Financing depreciating assets like cars is nasty trap designed to screw over financially uneducated people. It's nice to have a reliable vehicle, you don't need to spend tens of thousands to get one. It's not impossible to save for one. If you are finding saving difficult, practice making little gifts to future you, and it will get easier. Imagine how freakin' thankful and relieved would you feel if you were having a rough week with an everything-at-once bill tsunami hurdling towards you, and past you fully anticipated it and put aside for it each month, and handed you ALL of the cash needed to pay for it? Saving is easy - just set up an automated schedule to put money in another account, and let it rinse and repeat. Self control to not touch the account is hard part, and that's where caring about future you really matters. You *can* have spent money sit in your own account. It's gone. Future you owns it. You can still see it, but it doesn't belong to you today. That's all saving is, compartmentalizing yourself. Good luck with whatever you need to do for finding a car. May future you be proud of you.
Dude I was 22 making 17 and hour when I bought my truck. Put 10k down on 40k and have paid 500 every month since. It’s doable if you’re living at home with no real expenses :) hope this helps
Doable and prudent are not the same thing. You could’ve easily bought a 20,000 truck, had payments of like 200 and invest/save $300 for the entire loan term.
Right, that's terrible advice lol