The Dilemma of Purchasing a Car

I have lived in New York for almost two years.

I had a car, a really great Aztec (laugh if you want) that I loved dearly. It was gifted to me after my beloved Volvo died in the Summer of 2010. My parents the graciously gifted said Aztec to my brother after his vehicle died. Awesome.

So now I am searching for a new car. I desperately need one as the spare truck our family uses to haul things is on it’s last leg, and sometimes doesn’t start at all. My dad sometimes takes the truck and lets me borrow his car when I need to, but now it’s looking like that’s going to happen fewer and further between.

I am not a car person. In fact, I could really care less–I just need something that is reliable and has air conditioning and a radio. I like to think I’m pretty easy to please.

The crux of my particular problem is that my parents want me to wipe out my little nest egg and purchase a car outright so I don’t have to make payments. This would leave me with the money I put aside to make a deposit/first month’s rent in Atlanta and little else.

I would rather put about half of the nest egg down and then make small (ish) payments on the car monthly. My justification for this is that I don’t know how long I’m going to be out of work or what opportunities/situations may arise and I might actually need that money. Cars seems like such a bad investment, I really don’t want to spend all of the money on the car.

My mom in particular is worried that because I currently do not have a job I won’t be able to get competitive financing, or even be able to finance at all. I haven’t checked on this, and I’m unsure of what the numbers would actually come down to, but it’s something to think about. I am fairly optimistic I would be able to find a job within the next month or two at least.

In New York City I paid 104.00 per month on a Metrocard and took taxis pretty liberally–whenever I had to carry something heavy home or was too drunk to take the subway late at night. My previous transportation budget was somewhere between 215-275.00. That seems a doable amount to spend on a car payment, right?

I’d like to hear from you guys—what do you think I should do? Buy a cheaper car outright (anywhere from 8-10k?) Or make a smaller down payment and pay off a car each month (5-6k)?

2 thoughts on “The Dilemma of Purchasing a Car

  1. Debt is never good, since it lowers your credit rating, and you owe money. On the other hand, when the interest rate is zero it makes sense to borrow. I noticed that Toyota is still offering zero percent on the Corolla. Rebecca and I are both happy with ours, and on the basis of her starting a new job she qualified for the zero. She is paying a reasonable amount while her savings are accumulating interest.

  2. Pingback: Week 3 of the No-Spend Challenge | L Bee and the Money Tree

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