Buying a car on Loan Before D-School?

[Rand627]

Hey friends, question for ya on some logistics. My wife and I can afford to buy a car before dental school, but it won't be too exciting. If we take out a loan from some bank BEFORE dental school, and then we got all the D-School loans (which I know include an extra 24k ish for living expenses), would we just use loan payments to pay loan payments?

Ideally we'd just pay it off as soon as we got the loan, but that might not be feasible if we need the 24k to live. What are your thoughts here? Something to take our minds off of applications!

Thanks!

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[Incis0r]

How much is the car?

 

[DMDDDSHopeful]

The only time I've heard some plan like that was for a business venture or to purchase some capital--not a car that depreciates the moment you drive it off a lot. Do not make an investment into a car and use a loan to pay a loan. That's like opening a new credit card to pay off your other credit cards. Buy a cheap and used dependable car (e.g. Toyota) until you graduate and have a steady income.

 

[Rand627]

I'm going to be paying 8k or less for a car guys. This isn't an investment, this is transport.

 

[Rand627]

I'm going to be paying 8k or less for a car guys. This isn't an investment, this is transport.

The only reason I am buying this car is to 1, have the ability to work for the 6 months I have no school (jan to whenever school starts) and 2, to allow my wife to work while I go to school. In other words, the car is going to be necessary.

 

[BobbyBeavis]

I'm going to be paying 8k or less for a car guys. This isn't an investment, this is transport.

You don't need to spend 8 for just transport.

What area do you live in?

 

[Rand627]

While I appreciate the thought, this isn't a thread about what car I buy. 8k or less is a fine and well accepted amount for a cheap, dependable car. With the right car I'd go down to 5k which I think is nearing the minimum that I would do.

I was just wondering if it's a common thing for dental students to use some loan money to pay off a small car loan.

 

[ry_guy_chi]

To be honest, that is a terrible financial decision. I would consider doing a google search on this topic.

 

[Rand627]

To be honest, that is a terrible financial decision. I would consider doing a google search on this topic.

Care to explain?

 

[BobbyBeavis]

While I appreciate the thought, this isn't a thread about what car I buy. 8k or less is a fine and well accepted amount for a cheap, dependable car. With the right car I'd go down to 5k which I think is nearing the minimum that I would do.

I was just wondering if it's a common thing for dental students to use some loan money to pay off a small car loan.

I would say it's far from common but it certainly happens considering each financial aid presentation that was given during interviews was advising us to NEVER do such a thing.

Also, in your initial post, you say you can "afford" a car. Taking out loans is not affording it.

 

[Dukieee]

You say this isn't about what car to buy, but it is the difference in between affording it and not. You can get reliable cars for <4k.

 

[Rand627]

Okay friends, I've got it figured out. Thanks.

 

[Incis0r]

You can get reliable cars for <4k.

Any advice for how to find one? I am saving up for one and that's about my budget.

 

[Panis et Circenses]

Should I buy a car on a loan? I know what Dave Ramsey would tell you about that: absolutely not.

 

[Jordan95]

Any advice for how to find one? I am saving up for one and that's about my budget.

Craigslist, offer up, car gurus, cars.com, auto trader. Look into early to mid 2000's Honda Accord/Toyota Camry.

OP: don't finance anything.


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[577455]

I got a 2007 Honda Fit for $4000. 35MPG, cheap insurance, only paid for oil changes. Drove it for 5 years, then I sold it for $3900.

 

[Rand627]

I got a 2007 Honda Fit for $4000. 35MPG, cheap insurance, only paid for oil changes. Drove it for 5 years, then I sold it for $3900.

Definitely going to look at fits. Are you tall by any chance?

 

[577455]

Definitely going to look at fits. Are you tall by any chance?

Honda Fits are very reliable. They were sold for years in Asia and Europe as Honda Jazz before they brought them to the States.

I'm not tall, but the roof is quite high. You'll find the interior much roomier than the exterior dimensions would suggest.

 

[whaleofatale]

Hey friends, question for ya on some logistics. My wife and I can afford to buy a car before dental school, but it won't be too exciting. If we take out a loan from some bank BEFORE dental school, and then we got all the D-School loans (which I know include an extra 24k ish for living expenses), would we just use loan payments to pay loan payments?

Ideally we'd just pay it off as soon as we got the loan, but that might not be feasible if we need the 24k to live. What are your thoughts here? Something to take our minds off of applications!

Thanks!

Car loans are not considered an educational expense. You will be committing fraud if you use loan payments to go towards your car.

 

[Incis0r]

Car loans are not considered an educational expense. You will be committing fraud if you use loan payments to go towards your car.

Is it really fraud though? Car loans count towards transportation, which is figured into living expenses.

 

[whaleofatale]

Is it really fraud though? Car loans count towards transportation, which is figured into living expenses.

Yes, because car payments are not allowable in a school's cost of attendance. Only the costs of maintaining and operating a vehicle can be included. Funds for the purchase of a vehicle are absolutely not allowed.

 

[SableFire]

That's a really bad idea. Car loans are much lower than education loans in terms of interest. You'd be screwing yourself two-fold. First you'd replace the lower interest car loan with a higher interest education loan to get rid of the car loan. Then you'd let it collect interest for four years most likely not making any payments towards it (if you could you wouldn't be asking this question in the first place) and then you'd be stuck paying for that car for years to come. If you are able to make payments on the original loan during school the loan would be done or close to done by time you graduate assuming it was a 6 year loan which is quite long for 8k car IMO. In the end you are just going to be throwing away money in interest.

 

[Jordan95]

Please don't finance a $8,000 car. Start looking at cars for sale by owner. They will be half the price and better than anything sold at a dealership. My dad always said if you can't afford a car in cash then you shouldn't have a car.


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[Rand627]

Thanks for all the thoughts guys!

 

[BobbyBeavis]

Any advice for how to find one? I am saving up for one and that's about my budget.

Car auctions are good too

 

[Faux]

I have a 07 honda fit

 

[577455]

I have a 07 honda fit

Mark Zuckerberg also drives a Honda Fit. Great minds think alike

 

[Jordan95]

I have a 07 honda fit

Show off...

 

[HatInTheCat]

I'd pay cash for the car and keep a reserve for repairs. I am almost done paying off my car, so that when I do get to dental school, my expenses will be low.


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[Rand627]

At my interview at the U they told me all students get free UTA transit. So heck no, I'm not spending money on a car if I get in there. Public transport is kinda fun and I get good study time..plus I'd save thousands of dollars.