Finances

[DeeVeeZee]

Looking for some advice. So I am pretty much broke. I will most likely take out the max amount in stafford and grad plus to help. I live with my fiancé who works but right now we split a car. I will need another reliable form of transportation but I don't want to sink money into a beater. I am thinking of getting my first car payment so that I have a reliable ride. Does anyone have any suggestions about car payments while in med school? I am worried if I can handle it. Do people do this or am I being irresponsible?

Thanks

---

Members don't see this ad.

 

[abolt18]

Looking for some advice. So I am pretty much broke. I will most likely take out the max amount in stafford and grad plus to help. I live with my fiancé who works but right now we split a car. I will need another reliable form of transportation but I don't want to sink money into a beater. I am thinking of getting my first car payment so that I have a reliable ride. Does anyone have any suggestions about car payments while in med school? I am worried if I can handle it. Do people do this or am I being irresponsible?

Thanks

A 3-4K car should easily last you through med school. You can get a very reliable used car for a reasonable price. A little advice from the WCI.
http://whitecoatinvestor.com/dont-buy-stuff-you-cannot-afford/

"Car Loans

This is a personal pet peeve of mine. I don’t understand why someone needs to go into debt to get a car. I have owned quite a few cars in my life. I took out a loan on precisely one of them. The terms were exceptionally good given that the lenders were responsible for my conception. I paid that $3000 back with my 2nd or 3rd paycheck in residency. That is the only car payment I have ever made. Trust me when I say an $8000, or a $5000, or even the $1850 car I drove as a new attending gets you just as well from point A to point B as the latest $50,000 BMW. I like to drive nice cars as much as the next guy. Every time I get another one it is nicer than the last. But I always pay cash for it. Not only do you save on interest, but you usually save on the price of the car. Plus, you get to feel like a crack dealer when you walk in with $6000 in 20s that you pulled out of the ATM that morning. (Word to the wise-you’ll need to call your bank before trying to withdraw $6000 using your ATM card.) Don’t buy a depreciating asset on credit. If you can’t afford to pay cash for a new car, you can’t afford a new car. Buy a nice used one. Don’t have the cash for a nice used one? Buy a beater. Can’t save up $1500? Start pedaling. And if you’re going to own a second car before you’re an attending, there had best be a second job to go with it.

I am convinced that a large percentage of Americans spend their retirement funds on driving nice cars prior to retirement. Consider Mike, who buys a new car for $30,000 every three years. He can probably sell it for $15,000. He will likely spend more maintaining, repairing, and insuring the car than his friend Joe who drives the beater down the street. Joe bought his car for $3000 and will drive it into the ground over the course of six years. Mike’s annual cost of car ownership is about $5000 a year. Joe’s is about $500 a year. Over 40 years, $4500 invested at 5% real (after-inflation) is equal to about $544,000. Considering the average person 55+ has less than $100,000 saved for retirement, $544,000 would go a long way.

The money you save driving beaters isn’t limited to the purchase price either. They’re usually economy cars, so you save on gas. You save on insurance because you only need liability coverage. You save on licensing fees and believe it or not, you save on repairs. Not only are parts cheaper on inexpensive sedans, but you also save by avoiding repairs in the first place. When you have a new car you feel like you need to get every dent and ding and broken electric mirror fixed. But no one fixes a dent on a $1000 car. Plus, if you get hit due to the fault of someone else, you make a profit. It doesn’t take much to total a beater. A fender-bender will usually do it. And insurance companies will usually pay you more for the car than you can sell it for. I had one car I bought at auction for $8500 and drove for 4 years before it was totalled. I think the insurance company paid us $8000 for it. Cost of ownership? $125 a year. Not too bad. I might have been able to sell it for $5-6000 if I was lucky .

If you’re currently making car payments like most “normal Americans”, I suggest one of two options. First, sell the car and buy a beater. Then save up for the car you want. Second, pay off the car. When it is paid off, continue making the same car payment into a bank account set aside as your “car fund.” When it comes time to buy your next one, you’ll have the cash to do so."

 

[mk04447]

Lets make this simple. Medical school is about financial survival. That doesn't mean suicide. In the end you'll be able to massage the damage, but I suggest you minimize the bleed. If you need a car, get a car, if you need a TV, get a TV, but you can live like a doctor later. That was my fatherly speech.

Now, how I really feel. It depends on how smart you are. If you're street smart and understand the lingo you can buy the same thing Suzie got for half the price. Look out for holdback and make sure you know how much memo money is available. If they ever think you're more than a mini you've failed.

 

[DrKershaw]

You need to consider the costs of renting/mortgage payments, utilities, cable/internet, etc. that you'll be paying/splitting with your fiancé. Then determine what kind of lifestyle you'll want to have with the monies left over (lifestyle won't be able to be too lavish as a medical student anyway).

Once you figure out how much extra cash you'll have left over on a monthly basis, use that to determine what you can afford. Remember to factor in cost of insurance, gas, maintenance, repairs, etc. when you figure out what you can spend on car ownership.

Also, remember that the financial aid you receive only covers 10 months of the year (i.e. while you're actually enrolled in school) so unless you plan on getting a job over the summer, you'll need to save and spread out the aid an extra 2 months.

I leased a new car a year and a half before I got accepted. I was working at the time and had no trouble making the payments on it, but now that I'm in school, the payments take up a big chunk of my aid. Looking back, although leasing the new car gave me lower monthly payments than buying, I would have been perfectly satisfied with something that was a few years older but a fraction of the price, especially if it meant that I could have owned it outright by now. Ultimately, you need to decide how much you're going to be using it and what features are a necessity vs. luxury to figure out whether you should be looking into buying/leasing a new car or buying a used car. Also, make sure you look at fuel economy, safety features and expected reliability when looking at your choices because they all have major financial implications.

Oh and +1 to what mk04447 said. If you are smart about it, and know how to negotiate, you can get a great car for the price of a beater.

 

[WastedTime]

Go around dealerships and look for 2014 or 2015 models still on the lot close to New Years and try leasing. My brother and sister both were able to find economy cars like this and lease them for under $200 a month and zero down for 24 months. Miles might be limited but since u have two cars u can always switch when u have to travel longer distances.

 

[Redtwogreen]

We bought a car during school that was $5000 and was about one step up from being a beater car. I am two years out of school and we still drive it and it runs great. Our payments were about $100 a month which was very manageable for us. Don't get sucked into the 'living like a doctor' lifestyle hype just yet! I'd say focus on getting through school, getting some loans paid off, and then buy a car that doesn't suck, if you are still into that a couple of years after residency.

 

[IslandStyle808]

Besides this thread being over a year old, you cannot survive that easily without a car during 3rd year. Yeah you got to figure something out, as to whether it is a used car or leased care, you will need a car at the back end of medical school.