I am a 19 year old graduate who has never had a car, should I buy one NEW?

Question

I finish college in a semester and I'll have a degree, after that I plan to take a full year off of school until I decide if I need another degree. I make about $1,200 a month working 37 hours a week and my rent after everything is about $500. After school I want to pick up a part time job because I'll be bored without school. My question is, do you think I should just invest in a brand new car between the price of $15,000-$20,000 or should I just hope I can find a good used one. I figure a new car would last 10 years and have no problems, but would insurance or interest kill me?

Answer 1

If you can afford to pay cash for a new car, then do it. If not, I recommend a used car. One of the biggest disasters that can happen to someone is buying a car and having a high monthly payment on it, lose their only source of income, then have that car repossessed -- you'll still owe on the car itself, even after it's taken, your credit will be shot forever, and what's worse, you'll have to go out and replace the car you lost. You can avoid all of this by not buying one on credit in the first place.

Answer 2

A car can be a real money eater. And as a young driver, under 25, you will pay through the nose for insurance. Cars are also rapidly depreciating assets that decline rapidly in value, especially when new, so you might not want to buy a totally new car. Interest costs for car loans are also a real money eater, especially when the value of the car goes down over time.

An alternative would be to buy a late model used vehicle with a pretty decent reliability record - perhaps about 3-4 years old, to strike a balance between reliability and cost.

Now if you don't need to drive long distances very much or commute long ways, you may want to consider a "beater" car or older vehicle with a low price as your transportation if you're tight on the cash.

Answer 3

Consider this:
Do you have 3 years of driving experience?
How is your driving record?
What kind of car are gonna get?
I ask this because being an insurance agent, I see alot of younger people with less than 3 years of experience (which by insurance standards is no experience) getting brand new cars that need full coverage. Insurance payments in that situation are through the roof. May be even more than the car payment. A car payment is a big investment. One you could be dealing with for 3-5 years. So think about your financial situation first and whether or not you want to work that 2nd job in order to keep up your lifestyle. Call some insurance agencies or go online and get some free quotes for the kind of car you want to purchase, so you can figure that amount into your budget.

Answer 4

Don't get a new car. It loses its value right off the lot and gives you a payment without fail every month for the next four to ten(!) years.

Even if you bought a used car and had to replace the transmission or motor every year (about the most expensive repairs you can have), you would still be ahead.

Remember, new cars get old and some new cars turn into lemons. A used car that is five years old will easily go another ten if it is taken care of. Or buy a beater for $1000 and if it makes it anything past three months, you are already ahead.

I have a 22 year old car that I bought for $900 and it runs better than my wife's new car. I don't worry about putting collision coverage on it because the premium and deductible is the same as the value of the car after a few years.

Answer 5

Cars aren't typically what we call "investments" if you know what i mean. Also, cars don't really last 10 years without any problems. You will need to put some money into it after your warranty expires.
A good used one might be a good option based on your income. You need to consider, gas, insurance, maintenance costs, so if you buy new, it can quickly it away at your monthly budget. Another option is to go certified preowned. They have slightly longer warranties and you get to avoid some depreciation and the car is still relatively new.

Answer 6

A new car would be a great idea if you can afford the payments and insurance. they are one of the best ways to establish good credit provided you can make all payments on time.


Note: you have to have and keep full coverage until your car is paid off: Your insurance will be very high. If you are a full time student student with 3.0 average or higher you qualify for discounts on insurance but because of your age it will still be very high.

Answer 7

At your age, insurance on any vehicle is going to be high. I would suggest buying a new car. The warranty alone will make it worth the money, and you will know how the vehicle has been treated, you being the first owner. If properly cared for there is no reason your car should not last at least 10 years. My newest vehicle is 8 years old, the oldest 14, all run well. Good luck and congratulations on college!

Answer 8

First of all I would try to avoid using the word, "INVEST" so loosely. Secondly, you are still a teenager and there are no cars that a teenage wouldn't drive. Get yourself a jalopy and drive it . . . Don't let that era in your life go by the wayside. Thirdly, you should be able to find a better-paying job, somewhere, even if it means changing your name to Valdez and going down to San Ycedro, California, and crossing the border illegally.

Answer 9

a car is not something worth having debt for. Vehicles on payment plans tend to be more expensive than buying one with cash up front. If you can afford to buy it with cash up front, and you don't mind paying high insurance rates, go for it.

But if you will need to buy on a loan or payment plan, and don't want high insurance, buy a used vehicle. But i recommend not buying it from a dealer. I recommend buying a vehicle somebody is selling, and having a mechanic take a look at it before making your decision.

Answer 10

Have to agree with Kiosk.... you are bound to prang your first car a few times (no offence: we've all done it!) so get a cheap runaround until you find a decent graduate job and then buy a decent car.