Car loans?

[lmmulreany]

I was hoping to get some advice from some of you in school paying car loans, I'm a little ignorant on the issue. My car recently died and I can manage the summer without one but will need to have one when I start school in August. I don't plan on working in vet school except for breaks. How have some of you paid your car loans while in school? From my understanding you cannot use education loans to pay for car loans? I haven't received any financial aid info yet but I don't plan on taking out anything more than my federal loan. I'm not above begging to rich relatives but I'd like to at least try to pay for a car myself .
Sorry if this issue has been addressed before, I've had a really hard time navigating around the new SDN and the search option seems hopeless.


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[TooLove]

Are you working this summer? You could save up for a car that way, and I'd recommend it. I hate having a car payment while being in school.

 

[wildcatj]

I use my loans to pay my car payment every month. It's only ~$120/mo so it's not bad at all, but I made a huge down payment on it. My loans cover all my living expenses and I count car payment as a living expense. Once they give you that lump some of money for living expenses it can go wherever.

 

[lmmulreany]

Are you working this summer? You could save up for a car that way, and I'd recommend it. I hate having a car payment while being in school.

I recently left my job to move home and save money and I do plan on working through the summer, but I already have some credit card debt to pay off from the move. I also hate buying a car that will only last a few years, my last car was cheap ($4,200) and lasted three years but now I'm completely out of a car with nothing to trade in for a new one. I don't want that happening again while I am in school so I was hoping to get a more "investment" type car, but if people say paying back a car loan in school is a big hassle I haven't completely ruled out paying cash for something that will get me by.
Like a scooter .


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[lmmulreany]

I use my loans to pay my car payment every month. It's only ~$120/mo so it's not bad at all, but I made a huge down payment on it. My loans cover all my living expenses and I count car payment as a living expense. Once they give you that lump some of money for living expenses it can go wherever.[/
QUOTE]
Do you pay that with a government or private loan?



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[TooLove]

You're going to want to avoid private loans like the plague if at all possible.

 

[psilovethomas]

Have you looked into leasing? You can get a decent car for under $150 per month + a down payment due at signing of the lease. The car dealership may do all the maintenance for you, so you may not have to worry about that expense. And if you really love your car at the end of the lease, you can always choose to buy it.

 

[epivetlove]

I'd like to chime in about leasing. I've been leasing since 2012 and will turn in my lease next May. This is my first leasing experience, but so far, I've been very happy with my decision. We'll see if that stays the same when I go to turn in my keys--and hopefully lease another car until the remainder of my vet school career. Here's what I consider to be a few of the pros/cons:

Two biggest pros: Lower monthly payments (usually, it's very dependent on your credit score and if you have a co-signer or not) and leasing period generally lines up with bumper-to-bumper warranty, so no concerns about paying out of pocket to make any mechanical repairs. This has been a huge factor for me as I tend to have crappy luck with cars, but used cars in particular. My lease agreement also includes "road hazard" and general maintenance, which includes tire replacement (already had to replace 2 tires due to frickin' roofing nails), upholstery repair, tire rotations, and oil changes, to name a few. I pay about $200/month for a 2012 Nissan Altima SL because I have really good credit and I know the ins-and-outs of the car dealership business. Again, this will vary depending your credit score, but also on the type of car (make/model), trim of car, dealership, and dealer.

Two biggest cons: Mileage. You're going to get a set amount that you can accrue during the lease period. Mine is 47,500. About 15,000/year. This may seem like a lot, and for some people, it definitely is. I tend to drive a lot, plus I had a long commute for the first 1 1/2 years for work and school. You will get penalized for every mile that you go over the allotted amount, but this fee will vary. I think mine is something like $0.15 per mile. I also have some paint and body damage (hit a mysterious creature last July and it split my front bumper), so I will most likely get penalized for that, as well. Though I do plan on repairing the bumper before turning it in. And the fact that you don't own it...so you're not really making an investment. And like PSIL mentioned, there is always the option to buy at the end of the lease period. I don't know how favorable the process is as I don't intend to buy my car, so I haven't researched it.

Sorry for the novel. Hope that helps a bit. I'm happy to clarify and/or expand on anything you'd like.

 

[lmmulreany]

Thanks guys! I will have to check in to the leasing option.


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[Minnerbelle]

If you're in a fortunate position where you're pretty sure that your student loans after graduating vet school is easily doable, then do whatever the hell you want sistah.

BUT, if you're in the position of most students where you will have significant student debt that you're worried about significantly affecting your financial future/quality of life, then please please please consider minimizing the loans you take out for your car! Think about it this way. If you're going to have significant student debt, you'll be in a position where as soon as you graduate (and hopefully have a steady income stream) you have so much debt no one will want to give you loans for a nice car. And when you're already on the hook for significant student loans, you definitely can't afford car loans on top of that. So why would you put yourself on the hook for a $15-25k loan (hope you weren't planning on more) for a lease or new/gently used newer car WHEN YOU HAVE NO INCOME and are getting yourself deeper and deeper in debt by the year for which you have questionable affordability? Sure, a lease will allow you to "drive" a car for a lower monthly payment compared to buying a car. But at the end of 2 years you still don't own anything, and you'll have to buy that rather expensive gently used car for a pretty hefty amount if you want to continue having a car. Or move onto the next lease. Even at $150/month, if you keep leasing cars, you'll have paid $7200 by graduation with nothing to show for it. $7200 can buy you a pretty reliable used car that you can keep for a long time! It won't be the newest car, and it won't have the bells and whistles, but I mean... if you're in significant student debt that's the lifestyle you're looking to live for most of your adult life anyway. Don't think about it in terms of monthly payments when you think about affordability of a car, think about it in terms of absolute amount you'll pay for the car. Remember that a car loan is just like any loan, the lower the monthly payments are for a particular car, the more in interest you'll pay. That doesn't change even if you're using your federal direct loans to pay those monthly payments (actually probably worse, because i can bet the student loan interest rate is likely worse than the car loan interest rate).

You will thank yourself sooooo much later, if you choose the cheapest "reliable" car you can afford. If you have the option of begging rich relatives and paying that in cash without taking out extra loans, then take advantage of that. Again, unless you're in a fortunate situation where student loans isn't daunting for you, you can't afford to let pride get in the way just for the sake of "wanting to try and pay for a car yourself" if you have people who are willing to help IMO. I mean, once your student loans (with high interest rate) is all paid off, or nearly paid off, you can pay back that very nice relative if you want. If you really don't want to ask your relatives, that's your prerogative and totally none of my business. But whatever you do, I can't reiterate enough that you want to minimize the money you take out for loans for any reason.

 

[EngrSC]

Yes yes yes to Minnerbelle's response

(Can't figure out how to like from phone app)

 

[frozen_canadian]

Yes yes yes to Minnerbelle. You're a student. You should be driving a cheap POS car. I got through vet school on a 15 yr old car that I paid $2000 for. I'm a vet now and have been for 5 years and STILL can't afford a new car! In fact I'm still getting around in my (now) almost 20 yr old car!!!

 

[Jessperk]

My beat-up car I had since high school went out during my senior year of undergrad. I ended up getting a great deal on a 2012 model (dad is a car salesman, kind of nice sometimes). While it's a great investment with the low mileage and everything, I wish I would have gone with something much cheaper. I'm paying it off with student loans and it's no bueno.

 

[dovelover]

Beg from relatives. Do it. Yes, it will wound your pride, but you won't care about that when you see those loans start to pile up. And get the nicest, most reliable car you can within whatever budget you can swing with those contributions. When my parents offered to give me their very nice only a couple years old Subaru instead of their old hybrid that was going to need its ridiculously expensive hybird battery replaced in a year or two that I had been driving, it made me feel uncomfortable, but I certainly didn't turn it down. I now have a great car that, most importantly, will last me a good long time after I graduate, instead of having to get a new car partly through or immediately after vet school. And my mom was excited to take the old one and trade it in for a new car for herself, anyway, so we're all happy. Not everyone's in a situation where they can do that, but if you are, taking advantage of it is the best decision can make. Anything you can possibly do to reduce the amount of your loan is worth it (well, within reason-don't start robbing banks). Because where will your pride be when you're a new vet and can't afford to pay your rent because you have loan payments to make? Or can't make it to work because the bank repossessed the car you couldn't afford to make payments on? That may be an exaggeration, but depending on your career plans or the size of your loans, maybe not...