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Buying My First Car: A Personal Situation

I’ve come across this question multiple times from others, but I wanted to put my own situation into perspective.

The Purchase

Recently, I purchased a 2006 Honda Civic EX Coupe for $2500 CAD after tax (which is about $1850 USD). The car has 263,000 kilometers on it (equivalent to 163,000 miles). While I fully understand that this is quite a bit of mileage, my primary intention was to find a budget-friendly option for my first car. I aimed to acquire a vehicle that would allow me to learn how to drive a manual transmission without the anxiety of potentially damaging the transmission and clutch of a newer vehicle.

Initial Expectations

Initially, my plan was to save up and spend between $5,000 to $7,000 CAD on an automatic used Civic. However, the Universe had something different in store for me when I stumbled upon this current car. I’m genuinely thrilled with my choice, and it has exceeded my expectations.

Additional Costs and Repairs

So far, I have invested about $500 into the vehicle for new brakes and other miscellaneous repairs. I anticipate spending an additional $1500 for suspension work, which will bring my total investment to around $3000. I was fortunate to find a reliable and skilled mechanic who has also become a good friend and offers me great prices on repairs.

The Dilemma

Here lies the challenge: I have completely fallen in love with this car! Although my original intention was to use it for just a year, I’m hopeful to stretch it to 2 to 3 years at most while I save as much as possible. The issue, however, is that the car’s transmission is on the verge of failing. After getting the issues diagnosed, I learned that repairs will cost around $3500, not accounting for any other potential problems that may arise due to the car’s age. Aside from the transmission, everything else is in reasonably solid condition.

Financial Considerations

While it may seem that I have answered my own question concerning the car’s viability, I now need to consider my financial circumstances. Currently, I drive approximately 500 kilometers per month on average, which is quite manageable given that I work close to home and have most of my other activities nearby. Right now, I earn $36,000 gross per year, and my expected salary will be around $50,000 once my career is fully underway, which should be in about 1 to 2 years.

Monthly Expenses

My monthly expenses hover around $500, covering items such as gas, insurance, phone bills, clothes, food, and miscellaneous costs, with no rent expenses. This setup enables me to save about $2,000 to $2,500 monthly, as I am funneling most of my savings toward purchasing a home in the next few years.

Future Plans

As I previously mentioned, my objective is to save as diligently as possible at the age of 23. Once my current Civic reaches the end of its lifespan (assuming I don’t invest in repairs), my plan is to finance a newer model—specifically a 2016-2018 Civic. I anticipate having around $20,000 to $25,000 saved up by then. However, I’ve noticed that the prices in my area for decent vehicles like what I want range from $14,000 to $17,000, coupled with very high-interest rates.

Balancing Savings and Expenses

At that point, I’d likely make a down payment in the range of $5,000 to $7,000. One of my greatest concerns is that the potential monthly payments may hinder my savings progress. For most of my life until last year, I struggled with saving effectively, and as a result, I’m not eager to slip back into that cycle.

I’ve been receiving conflicting advice from family and friends about whether I should invest in fixing my current car to boost its value to about $7,000 to $8,000 or just keep driving it until it no longer runs. Given how critical the transmission issue is right now, I feel a sense of urgency to make a decision but I would appreciate any insights or perspectives from others regarding my situation.

Seeking Guidance

Thank you for taking the time to read my story! I look forward to your advice and insights. Please feel free to ask any further questions if you need more details.

How AI Legalese Decoder Can Help

Navigating car purchases and repairs can often involve intricate contracts and legal terminology that might be overwhelming. This is where AI Legalese Decoder can be incredibly beneficial. It can help you understand terms and conditions regarding financing options, insurance policies, and service agreements. By simplifying legal jargon, you can make more informed decisions about your car-related expenses, ensuring you stay on track with your financial goals while avoiding pitfalls that could impact your savings. Whether it’s comprehending your rights regarding repairs or the implications of a financing contract, AI Legalese Decoder can serve as a valuable resource in your car ownership journey.

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