Applying for Car Loan as Student

[cameljocke]

So I'm going to be an M1 this year, and am looking to buy a car. I have excellent credit and can put a significant down payment on the car to reduce the payments so that I can fit it into my financial aid budget. However, I quit my job last week so I'm technically "unemployed."

Will dealers/lenders offer me loans if I'm unemployed? Has anyone else dealt with this and gotten around it? I'm just looking for advice or experiences of other students in similar situations, thanks.

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[SomeDoc]

So I'm going to be an M1 this year, and am looking to buy a car. I have excellent credit and can put a significant down payment on the car to reduce the payments so that I can fit it into my financial aid budget. However, I quit my job last week so I'm technically "unemployed."

Will dealers/lenders offer me loans if I'm unemployed? Has anyone else dealt with this and gotten around it? I'm just looking for advice or experiences of other students in similar situations, thanks.

My advice would be to use your significant downpayment to buy a cheap used car ($1000-3000). Budget some money from financial aid for fuel costs and maintenance costs. Shop around and make sure you use both carfax and autocheck to verify histories- as some events only show up on one or the other service. Unless you plan on buying a hybrid (which are still expensive used due to lower relative supply), putting money down on a new gas-only car for the long haul IMO is a poor investment. You can sell your used car when you no longer need it, and are ready to make a long-term investment by later on purchasing a more fuel efficient model when the technology has become more mainstream, and when prices have gone down due to increases in supply spurred from increases in demand.

 

[TheRealMD]

Since I'm guessing you'd be using loan money to pay off the car, wouldn't you be paying interest twice on what is essentially a depreciating asset? Sounds like a bad financial move to me.

 

[njbmd]

Moved to Finance Forum

 

[Xerxes1729]

Since I'm guessing you'd be using loan money to pay off the car, wouldn't you be paying interest twice on what is essentially a depreciating asset? Sounds like a bad financial move to me.

I agree. Buy a solid used car, get it checked by a mechanic you trust, and save your money.

 

[zinjanthropus]

I agree. Buy a solid used car, get it checked by a mechanic you trust, and save your money.

another take - i bought a cheap new car and took extra student loan money for the payments (your financial aid officer can adjust your COA a set amount for car payments) and loved the decision. I didn't have to put another thought into transportation during med school and had the car paid off at the end of the 4 years making for a nice car to sell for a down payment on my car that will last me through residency (could have easily kept the car and had a vehicle still under warranty with no payments if i needed to as well but wifey's salary is high enough thee days to make the depreciation of another new one not too bad of a decision).

having said that - i would say that a late model certified used car makes the best economic sense (e.g. a 2006 or 2007 honda civic still under manufacturer warranty) - let someone else pay the major depreciation cost before you come along.

 

[mmcnam]

I'm buying a 2008 Nissan Versa and I'm also an incoming M1. I wrestled with this for a little while, but I need to have a car for third and fourth years for sure and I can easily fit the insurance, gas and car payments into my student budget. Yes, I will be paying off one loan with another, but I have accepted this as a neccessary path in getting something that I will both want and need for medical school. My school cost of attendance is just over $70k, which I will borrow in full at first. Has anyone else gone this route and would care to share their impressions down the road?

 

[TMP-SMX]

I'd hope you could fit a lot of expenses in a grand total of over 300k for 4 years. Where are you going to school, and I hope you have budgeted all of this and maybe rethink the car purchase. I see it is a lower priced car but still you can't find a similar used car and save cash?

 

[mmcnam]

I'd hope you could fit a lot of expenses in a grand total of over 300k for 4 years. Where are you going to school, and I hope you have budgeted all of this and maybe rethink the car purchase. I see it is a lower priced car but still you can't find a similar used car and save cash?

i might end up saving 5000 at the most, but that seems like a small drop in a very big bucket. this is emory's cost of attendance, and even with car payments and insurance, there is still going to be a significant amount of money left over.

 

[TMP-SMX]

So don't take out the full amount. Some schools just have generous CoAs which is a good thing but you don't and shouldn't have to take out the full amount. Itemize your expenses.

 

[cdgee]

isn't it dangerous to take on debt while you don't have an income?

 

[mmcnam]

how on earth are we supposed to get a medical education otherwise?