promotion image of download ymail app
Promoted
Anonymous
Anonymous asked in Cars & TransportationBuying & Selling · 2 months ago

What should I know? ?

Im 18 w no credit what so ever. My car broke down recently and im wondering if its even worth spending 2k to have an old *** car fixed. I was thinking of instead using my money to put a down payment on a car but I dont want to get screwed over so what price ranges should I be looking at ? Should I buy new or used ? What is a good interest rate for someone my age w no credit ? Should I finance through my bank or dealer ? What is a good price for someone my age ? Any other tips and recommendations for a first time buyer ? 

Update:

For the idiot who asked if i had a job obv. I wouldn’t try to finance a car without a job . 

11 Answers

Relevance
  • 2 months ago

    Many manufacturers have first time buyer programs. With no credit and 2 grand down I'd expect rates between 8 and 12 percent.

    • Commenter avatarLogin to reply the answers
  • 2 months ago

    At your age, and with no credit, you will NOT be getting any loans for any purpose, much less buying a new or used car. Loans go to people with a multi year record of sufficient income.

    Forget buy here finance here dealers, they are rip offs.

    You cannot qualify to buy a new car, unless you pay 100% in cash.

    • Commenter avatarLogin to reply the answers
  • 2 months ago

    You should know that owning any car is expensive in maintenance. Try to get a job and save some money.

    • Commenter avatarLogin to reply the answers
  • 2 months ago

    Get a push bike instead, get fit, save the planet lol & save you bank balance!

    • Commenter avatarLogin to reply the answers
  • How do you think about the answers? You can sign in to vote the answer.
  • 2 months ago

    When money is tight, the first option should always be to fix the car you have. There are some variables you didn't mention - most importantly what is the overall condition of the car other than the current issue that needs work? Or more specifically- if you do the $2000 repair how long do you think the car would last until you have another major repair? If the car is falling apart and $2,000 would just fix one of many issues, then its probably not worth it. If the car is in good shape and $2000 would fix the only problem it has and you think it would give you another couple years and 30,000 miles with no other issues, then maybe its completely worthwhile.

    Use the internet to your advantage here. Search for chat forums for your vehicle and try to figure out what the common problems are with your vehicle. If there are a bunch of other ticking time bomb maintenance items then cut your losses and jump to another car. If the current issue is the ONLY common issue, maybe its worth fixing it and you'll get several more years.

    As just one example, Honda Odyssey mini-vans in the early 2000's were notorious for early transmission failures - but the engines and the rest of the vehicle were nearly bulletproof. So if you knew that, and you had one with a failed transmission, it would be worth spending the $2000 to get a rebuilt transmission installed because you know the engine and everything else will last.

    If you decide to give up on your current car, then focus on keeping your debt as low as possible on a new (to you) vehicle. Do lots of research to understand the reliability and common maintenance items of any vehicle you purchase (before you purchase it). Look for a vehicle at least 3-5 years old, and in your situation 7-10 years old might be best. If you have done your research and buy a vehicle known for its reliability you will come out far ahead financially vs paying more for a newer car.

    Research a concept called the "bathtub curve" - basically picture a graph where the horizontal line is the age of a car, and the vertical axis is the cost of ownership for 1 year. If you graph the average cost to own and operate a car it starts out very high when the car is new - mainly because of the depreciation in the value of the car. As the car gets older the depreciation slows down, then there's a flat spot from about 5 years old to 10 or 15 (depending how reliable the vehicle is) and then it starts to go back up (due to maintenance costs) when the car is 10-15 years old. The result is a "bathtub" shaped chart of the cost of owning a vehicle relative to the age of the vehicle.

    So the smart thing to do is to buy cars at the beginning of that flat low section - usually around 3-7 years old, keep them and maintain them but do your research and know when that maintenance cost curve is going to start going back up and sell them.

    As an example I purchased a minivan that was 7 years old with 85,000 miles on it for $7000. I spent about $4000 over the next 7 years on repairs, and sold the van for $3000. So my cost of ownership was $8,000 for 7 years and about 85,000 miles of transportation. The person who bought the car brand new got the same amount of use, but probably paid well over $20,000 in depreciation between their original purchase price vs their trade in price. Sure they had the nice new car smell and the reliability of not having to tow it to a mechanic for a new fuel pump. But until you're in a position to pay 2-4x more in total ownership costs, those are luxuries that you can't afford (and neither could I at that stage in my life).

    Whatever you do, avoid leases like the plague. They have been proven to be the most expensive way to obtain a personal vehicle. Even buying a brand new car and eating that early depreciation ends up being less expensive than a lease in the long run.Best of luck to you, hope this was useful info.

    • Commenter avatarLogin to reply the answers
  • Anonymous
    2 months ago

    Apply for a loan for a new subcompact car (Nissan Versa, Mitsu Mirage, Toyota Yaris, Hyundai Accent, Kia Rio)

    • Commenter avatarLogin to reply the answers
  • Anonymous
    2 months ago

    Depending on the year, make, model, and mileage of your current vehicle - it might be better to fix it.  However, if it's not worth $2K now, I wouldn't put that kind of money into it.  (But that still might be the smartest choice).

    New or used.... Used you may be buying someone else's headache - with unknown problems - but it's probably a much cheaper option... New is great if you can afford the insurance (you must have collision insurance on a financed vehicle - for the life of the loan).  I'd speak to your insurance agent before thinking of buying a new car - see what the insurance will cost - before trying taking on a car loan and exorbitant insurance payments.

    With no credit (or no credit history) you'd probably need a co-signer to qualify for a loan.  New cars have lower interest rates - but the cost of insurance may be a factor in what your monthly payment would be.

    God only knows what interest rate they would charge you - just make sure you can afford the payment before signing anything.  Good luck.

    • Commenter avatarLogin to reply the answers
  • Anonymous
    2 months ago

    It's always preferable to buy new. Get you're own financing. Go to a credit union & discuss it. That's what they're there for.

    If you buy used, ask for the maintenance records. No records means you walk away. No discussion. Walk away. Google the car that you might buy. Look at the prices & customer satisfaction. You want a used car that looks nice - inside & out. Take a refrigerator magnet & touch it to the fenders, doors, the hood, trunk, & everywhere you can reach.  If it doesn't stick don't buy it. It's been in a wreck A magnet doesn't stick to bondo. Is the motor clean? Some dust is ok, but is there oil on things? Green or red fluid? Pull the oil dip stick. Is it black? If so, it's been awhile since it was changed. If it has a trans stick, pull it, too. If it smells like cork, it's burnt (problems).

    When I was a kid, I bought a ten year old Chevy. My mom's neighbor was a motorhead. I got a nice car & he souped it up.

    • Commenter avatarLogin to reply the answers
  • Anonymous
    2 months ago

    Qualifying for a car loan at 18 with no credit is nearly impossible unless you have a good cosigner or you have a large down payment and use a predatory buy here pay here place.  The jacked up price is as important or more than the rate.

    • Commenter avatarLogin to reply the answers
  • 2 months ago

    Can you afford it? Do you have a job?

    • Commenter avatarLogin to reply the answers
Still have questions? Get your answers by asking now.