- May 28, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Considering Buying My First Car
I (24F) am finally considering buying my first car, but I am unsure if it’s the best financial decision for me at this time. Commuting to work via bus and train has become increasingly inconvenient due to the unreliable, dirty, and unsafe transit system in Chicago.
I work as a nurse and make around 80-85k annually, with a take-home pay of $2000-$2500 biweekly after deductions. I have $22,000 in a High Yield Savings Account, contribute 5% to my 401k, and have approximately $10,000 in my Roth IRA (which I only started contributing to late 2022). I have paid off $17,000 of my student loans, with $10,500 left to pay, which I plan on settling in the next few months before purchasing a car. My monthly rent and utilities amount to $900, and my credit score is 758. I am single with no kids.
## Hesitation About Buying a Car
I believe my hesitation to buy a car stems from my tendency to be frugal with money. Although I am interested in getting a Honda Civic as my first car, the current inflated car prices make me uncertain about the timing of my purchase. While I believe I can afford it, I feel the need for additional justification before making the decision.
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****** just grabbed a
What is the cost of parking at work? Don’t forget to factor that too. Anything short of teleportation is a pain in the ass. I get it, public transportation can be gross, you’re not wrong for wanting to drive. Just consider all of the costs. $150 for insurance 200 for gas, $x for parking on top of the car payment. And state tax.
I would look at how getting a car will change your routine. Personally, I would buy one because of the time saved spent on public transit vs owning your own car.
Back when I was in school and had no money, car or job, I had to rely on public transit (bus and light rail system). It would take me at least 1.5 hours to get to school from my house just due to having to use bus and light rail. That does not include a 10-15 minute walk to the bus stop from my house whether it was raining or shining. I could not wait to save up to buy a car (using financial aid money). I’ve seen fights on public transit, people using the waiting stations as a restroom, loud kids, couples arguing. I do not miss any of those at all! I was almost always on a schedule and had to plan out everything hours in advance so I wouldn’t miss getting picked or left stranded.
After getting a car, it improved my quality of life and I felt like I had more time to myself. I no longer felt tense or tired from having to deal with random people on public transit and that includes transients who were drugged out. Instead of waking up at 5 am to make it to my 7:30 am class, I could now wake up at 6:30 am and get ready and still make it to class on time. The time saved from just being able to drive myself places was a huge game changer for me.
The other side to look at is just the cost of maintaining a (used) car and gas. But this was more than 10 years ago for me so used cars nowadays are more reliable than used cars back then. Making a pros and cons list should help.
Sound you should be a car based on this sentence.
I live in chicago and the transit system has been increasingly unreliable, dirty, and unsafe.
If you can, wait until Q4 (Oct-Dec) when dealerships are trying to hit end-of-year sales goals. It also gives you time to save up in a high yield savings account and research cars online. Like the other reply, though, if you can make it work with public transit, and use ZipCar or Turo when you have to have a car for a long trip, keep using public transit.
Where in the us are you paying $900 for rent?? That’s bonkers. Good on you for deal hunting.
I bought the cheapest used car I could that was in good working condition (10 year old Fiat 500 with 80k miles, purchased for $6k). 30-35 mpg, parking is a breeze, insurance is dirt cheap when the car is trash, and it’s doing great after a year with no problems. It’s got cosmetic damage and it won’t help me pick up any chicks, but luckily my wife doesn’t mind 😁
Car ownership doesn’t have to be super expensive if you just want a utility vehicle. Too many people conflate the utility of a car with the flashy lifestyle choices.
I have a car and also live in Chicago. You have to factor in the annual costs, like Illinois car registration, city sticker and street permit (depending on your street). To me, it’s 100% worth it. I don’t drive much and I still use the L when it just makes better sense than having to fight traffic or parking. I say go for it 👍🏼
Yes, you should buy a car. Especially if it’s a Honda Civic. They are reliable and last a long time. It is easily within your budget and salary. You work hard as a nurse, it’s not like you’re going on a luxury vacation or buying expensive purses. A Civic is a perfectly reasonable car. And being able to drive to work (or anywhere else) will increase your quality of life significantly. I also live in Chicago and agree that public transit has become increasingly unsafe and dirty here.
I think you should absolutely buy a car, and I love the plan of you paying off your loans first.
Here’s why a car purchase in the near future is a good idea:
With housing cost inflation, higher interest rates, and how long cars can last now, buying a new reliable car in your early 20s is one of the best things you can do. Odds are, the want for a car will turn into a need for a car in a few years, if/when you move and/or start a family.
After you pay your loans off, save up 20% as a down payment, and finance the car over 3 years. A Honda civic will be perfect, you will likely not need another car for at least 15 years. A car is not a normal investment, since it depreciates, but it is a preventative investment, meaning you will not have to spend any more money for a long time on a car, which will be useful when you’re saving for home ownership. A paid off reliable car is quite valuable.
Great job on the cash savings, as soon as you get to 6 months cash savings, I’d increase your 401k contribution to 15% to maximize tax deferred investment.
As far as “time to buy” goes, the time to buy is soon, because you can do it soon. Cars (especially reliable makes) will likely only get more expensive. Mitigate the interest rate by shortening the term. You will thank yourself over and over again for 10 years when the car is paid off.
And in 15 years, people will praise you for how smart you were to buy a Civic and keep it for 15 years.
honestly, I would say you have enough and a car can give you a lot of freedom. my husband and i bought both of our cars as rebranded titles and we pay $189 for insurance per month and $375 total for the payment. my advice to anyone (I used to be an accountant) is to live 2-3 months pretending you have a car (since this seems like its a luxury item and not a necessity). Create a budget tracking everything you spend each month and add the cost of the car into it. if you do see yourself paying off a significant amount of debt, factor that into the budget as well. if you dont miss the money then buy the car. if you are really struggling to get by, maybe its not the right time. by the end of those months you’ll have a nice nest egg to put towards a car.
You can always buy a scooter or some beater on FB marketplace if you want something to shuttle around in and aren’t interested in an investment like a car.
Have you tried renting a room near your job? It’ll save you on commuting and you won’t need to get a car.
Look into single owner, recently used cars that are 1-2 years old. A lot of them will still have power train warranty left, or they might have extended warranty packages available that would give you more coverage than factory warranty likely at a lower price than the brand new prices.
Edit: An older and more wiser colleague of mine at work also recommended that when you shop for a car, try and find a dealership in a small town nearby. In the cities there are always new clients, but in the small town the bulk of clients are likely recurring clients. If a dealership is doing well in a small town and has been doing well for a good couple of years, it is most likely because they treat their customers very well. It would lower the risk of a salesman trying to shaft you.
As someone who works for CTA and can ride free, I still refuse to because of the bums, uncleanliness, and safety…lol That said, car prices have definitely came back down to normal. Interest rates have not unless your credit is good enough to qualify for a manufacturer promo. We just bought a new 24 Honda CRV sport touring hybrid for under msrp at McGrath Honda of at Charles. They had plenty of civics there as well as others.
Side note, single and no kids, you should be drinking up all the OT you can get now. My wife is a nurse at Northwestern and there is still massive OT with triple incentive pay on every shift picked up.
How unsafe is it driving with the road rage nuts these days?
I think you should. I’m biased bc I also live in chicago and I started driving to work and it has made my life so much easier. I couldn’t go back to train life at this point lol. You are probably busting your ass being a nurse.
With that being said I would highly recommend trying to buy a car debt free. So maybe that means you save $1000 per month for 6 months and then buy a car (or whatever version of that equation makes sense for you). I really enjoy not having the monthly payment or paying interest.
I own two cars. Try your hardest not to own one. Explore if you can even make the math work with ride shares. Or move closer to work?
If you do buy a car my one and only recommendation is to not buy a brand new one! It’s one of the worst financial decisions you could make as they lose significant value as soon as it’s driven off the lot. Look for a car that’s a couple years old with low miles and one owner. My parents have had great luck buying cars that were owned by the dealership. They were a few years old but had no issues whatsoever and still had the new car smell.
Car is deflating deprecating asset, you buy when you need and what you need. House on the other end is appreciating asset which you should buy as soon as you can afford.
If you don’t have one now, why get one? They drain you
Money wise it seems you can afford it. It’s just if the cost of the car and everything that goes with it is worth it. Have you tried maybe renting a car for a week and seeing how driving to work actually is? With traffic and other things it might be easier to stick with public transport. Also think about where the car will be (if it’s safe).
Any chance you could make Metra work? Unlike El it’s still safe and a day pass is $6.
Just my 2 pennies, if you have the money saved up, go buy your car using your money and not taking out a car loan. Sounds like public transportation has been working for you. If it doesn’t bother you, ride that out a bit longer until you can buy whatever vehicle in cash.
Car prices have been dropping because of high interest rates, but high interest rates eat into the savings from lower prices. There are other costs you should consider before buying a car:
– cost of gas and if you’re near a gas station or not
– cost of car insurance
– cost of car maintenance (tires, oil change, filters, etc)
– your parking situation at home and work, and if you have to pay for spots/garage (if you can park at a garage at home/work, then that makes it much better)
– car registration and plates
– cost of driver’s license if you don’t have one
There are calculators you can look up online to help you estimate some of those. For insurance, the cheaper and older the car is, the lower the cost to insure.
There are a lot of hidden costs to cars that many don’t realize, so it’s good to be aware. Also, it sucks that the CTA has gotten so bad recently that people would rather drive. Would carpooling be an option for you?
If you go gas/hybrid, just go with what is most efficient or cheapest, except don’t buy a beater just because it’s cheap. Get a used, reliable car that’s in good shape. Can’t go wrong with a Civic, Camry, Corolla, Prius, Accord, etc.
If you have a garage, or if there is a Level 2 complimentary charger near you or in your garage, then a cheap EV is also an option. But if you can’t charge at home or work then just go with gas or hybrid.
I feel for you. I travelled to Gary, Indiana a few weeks back and had to drive back to the airport for an early morning flight home. The road through Chicago runs parallel with the train line and boy did I feel sorry for those folks catching that train at 4:30am in the morning. If I had a 24 year old daughter I would probably buy her a car to keep her off that train.
My advice, buy an Accord or Camry used and bump up that 401k contribution to 10%.
Buy a used car in cash. New cars and loans in general are always a bad decision.
Having a car is nice but if you street parking then please consider street cleaning and snow plowing. You will need to move your car around to clear the street and at some places it is as early as 6am. Sometimes you need to park blocks and blocks away. And if you have an assigned parking spot at your apt it def comes with extra cost monthly. Insurance will be high since you never had a car before, registration, maintenance, inspection, gas, parking (paid public places) and high interest rate, if you can afford it all then go for it. All good wishes to you!
You’re financially set to afford a car. Now, you get the headache of determining what’s the best deal for your finances. I’d look at the used Mazda 3’s. They’re reliable, and you’ll save a significant amount not buying a Toyota or Honda/Accord.
People advocating for cash purchases for cars need to touch grass. It’s a good idea if you can afford it, but it doesn’t sound like you’re happy to do your own repairs/maintenance. You’ll end up with a never ending project if you buy something with cash considering your current finances. Get something that will last and drive it into the ground over the next decade. Put as much down as possible and get a 3 year loan. You don’t have to become a grease monkey, but you need to learn what maintenance is required and do it/pay for it.
I would honestly wait a year or two if you don’t need a car. EV prices will continue to drop. There is almost no used inventory, so that helps keep costs high.
Are you able to save until you can pay cash for a used car?
Ya you should buy it.
At 80k a year, the conservative option is to set your car buying budget at $8k and then ensure that car related costs (parking, gas, insurance) is less than 10% of your take home pay.
Given that even used cars are pretty expensive, it may be difficult to find one at that price point that is also reliable. Since you have time, hunt for deals!
I can’t stand that hate toward car purchases on these subs. Living in the Midwest means that for many of us having a car is necessary and we often spend a lot of time in it. I don’t get why paying for a decent car can’t be a quality of life thing worth spending money on. Honestly at some point it makes sense to spend the money on stuff that you need and use and it’s ok to want a nicer, safer, reliable car. If you have the money and it would make your life easier and feel safer then why not?