Student loans and a new car loan?

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sitbedwell
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Student loans and a new car loan?

Postby sitbedwell » Mon Nov 19, 2012 10:06 am

I think I may have dug myself into a money pit with this one.

I have a little under $28,000 in student loans, at a minimum payment of $353 a month. I'm hesitant to add ontop of that a car loan plus saving for a wedding next year...

My car is a 2006, which just cost $1300 to repair the broken a/c. In the past with my cars, once once the a/c needs to be repaired the car dies in six months. This was the first major repair to the car so I was surprised this happened. I paid for the repair with a cushion in my checking account.

I currently have $10,000 in savings for everything: emergency fund, wedding, and a future car. I don't have the monthly allowance to afford financing, unless it's for a 72 months...which just sounds outrageous.

The car is also worth about $4,000 right now.

Here is what I'm thinking:
(1) Trade in car, now. Use $14,000 to pay for another car.
(2) Trade in car, put down an additional $5,000 and finance the $10,000 for 72 months...

Any other suggestions?

LeRainDrop
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Re: Student loans and a new car loan?

Postby LeRainDrop » Mon Nov 19, 2012 10:15 am

Probably not what you want to hear, but my recommendations would be:

(1) Keep the car, no change. The A/C premonition, while anecdotally true about another car(s) in your past, seems strange to rely on for this car in the future. If that is the only thing that has gone wrong with it so far, then I wouldn't worry. Also, it's a 2006, which is not particularly old. OR

(2) Trade in the car but spend no more than $6,000 on the new one. Really, ideally, a person should always be paying cash for a car because they put aside a specific amount monthly to save for car replacement. You will be glad to have cash in your pockets when the wedding comes around.

Particularly with a wedding coming up that you need to save for, I wouldn't recommend taking on more debt or even getting rid of your car out of quasi-superstition. Good luck!

Tightwad
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Re: Student loans and a new car loan?

Postby Tightwad » Mon Nov 19, 2012 12:34 pm

Here is what I'm thinking:
(1) Trade in car, now. Use $14,000 to pay for another car.
(2) Trade in car, put down an additional $5,000 and finance the $10,000 for 72 months...


With both of these scenarios, you seem to have your sights set on another car. I agree with LeRaindrop, cash is your friend when the wedding rolls around. Caterers, wedding dress vendors, photographers, etc want their money upfront, not a "I bought a car so I don't have any money" payment plan.

catchingup
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Re: Student loans and a new car loan?

Postby catchingup » Mon Nov 19, 2012 12:48 pm

What kind of car is it, and what's the mileage? I'm in the "keep the car" camp unless you have 100,000+ miles AND the model's notorious for issues. Otherwise, I'd regard the AC issue as a statistical anomaly and keep going until something does happen or you can afford to pay cash for an upgrade. If you have a solid reason to distrust the car - more than you've stated - make an even trade, your $4000 car for another.

DoingHomework
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Re: Student loans and a new car loan?

Postby DoingHomework » Mon Nov 19, 2012 2:32 pm

Jeez, KEEP the car. There is no reason to throw away a 6 year old car. Your A/C has 2 likely things that may have failed - the compressor or the rubber seals went bad and let the refrigerant leak out. Neither of those has any relationship at all to impending multiple organ failure.

Keep the car, take really good care of it, and start saving for a new one.

sitbedwell
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Re: Student loans and a new car loan?

Postby sitbedwell » Tue Nov 20, 2012 5:59 am

Hi everyone, thanks for the replies!

LeRainDrop wrote:(1) Keep the car, no change.


This was always an option, considering I wasn't too happy to throw a wedding out the door for a car.

catchingup wrote:...Otherwise, I'd regard the AC issue as a statistical anomaly and keep going until something does happen or you can afford to pay cash for an upgrade. If you have a solid reason to distrust the car - more than you've stated - make an even trade, your $4000 car for another.


From what I have heard, this year is the better of the lot especially with a mileage of 65k.

Thanks for the suggestions. I will probably keep saving up for a car until the next issue happens on the car.

slweal
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Re: Student loans and a new car loan?

Postby slweal » Sun Nov 25, 2012 8:35 pm

2006? Are you kidding me? My last car was a 1996 (which I drove until the beginning of 2012). And with over 230,000 miles- it was time. At least you have the option of keeping the car. I had to pile on a car loan on top of my student loans. Now, I'm working towards getting my total debt under what it was when I graduated which will hopefully happen by February.


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