Buying a car for residency.

[PatrickBateman]

I'd like to get a relatively inexpensive car that I know how to fix. I'm thinking of looking for a 95-00 corolla. Here's the problam. I expect it'll cost me around 4k. I don't have the cash to pay up front and as far as I know you can't get a car loan for less than about 8k.....or can you? Have any of you found a way to get around this problem?

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[Solideliquid]

Go to the Toyota dealership.

Lease a brand new car for $0 down (they have deals occasionaly) and pay about $200-300/month.

 

[PatrickBateman]

Go to the Toyota dealership.

Lease a brand new car for $0 down (they have deals occasionaly) and pay about $200-300/month.

That's exactly what I don't want to do. I'm trying to save money by bying a cheap car. $200 a month is a significant PITA.

I also won't be buying through a dealer as you pay a dividend for doing so. The question is basically concerning how to raise the cash, ie how do I get an auto loan for only around 4k?

 

[labangel]

That's exactly what I don't want to do. I'm trying to save money by bying a cheap car. $200 a month is a significant PITA.

I also won't be buying through a dealer as you pay a dividend for doing so. The question is basically concerning how to raise the cash, ie how do I get an auto loan for only around 4k?

It's possible to get a car loan for less than 8000. A few years ago I bought a used car and took out a 5000 loan. At the time, they said they couldn't give me a loan for less than that because I didn't have much of a credit history. My payments were about 140/mo I think, and I was able to pay off the loan in 1.5 years by paying extra each month. And this was on a take-home pay of <20,000/year. My point is, it's totally doable. Hope this helps!

 

[PatrickBateman]

At the time, they said they couldn't give me a loan for less than that because I didn't have much of a credit history.

Yeah, that's what happened to me when I took out my last car loan, except they said they couldn't give me one for less than 8k. Who knows? Maybe I can get one for less now. Is there any way of working out from your credit score how small a loan you can get?


Anyone else think it insane that if your credit is bad you can't get a SMALLER loan? It's extortion, right?

 

[14022]

There are credit cards you can get with interest around 5-6%, which is less than the interest rate on my used car. And you can easily get a $4000 balance.

 

[PatrickBateman]

There are credit cards you can get with interest around 5-6%, which is less than the interest rate on my used car. And you can easily get a $4000 balance.

Interesting. Aren't those rates generally just for one year? And how could I buy a car from a private seller with a credit card? Could I transfer the 4k from the card to by bank acount and just cut a cheque? I know the low rate doesn't apply to cash advances. Does it apply to balance transfers?

 

[14022]

Interesting. Aren't those rates generally just for one year? And how could I buy a car from a private seller with a credit card? Could I transfer the 4k from the card to by bank acount and just cut a cheque? I know the low rate doesn't apply to cash advances. Does it apply to balance transfers?

Some cards will give you intro rates for as low as 0% for 18 months...and then like anywhere from 7-19% afterwards. My current credit cards (chase and citibank) will often send me checks that I can use for balance transfers that will be as low as 2.99% until the balance is paid off. The checks can be written to anybody, even yourself. The balance transfer fee ranges from 0-3% depending on the offer. Cash asvance is another way to get around using a credit card to buy from a previous owner.

Although they say a car loan cannot be made for less than $8000, I imagine this would be from the dealer themselves in an attempt to sell more expensive cars. If you contact banks yourself, you may be able to get a $4000 auto loan.

Also, my school offers up to $15,000 in "relocation loans" for graduating 4th years. The rates are the same as the current student loan rates. You may be able to see if your financial aid office offers this.

 

[FrkyBgStok]

you can get a loan but the payments as someone stated will be $140 each month. for $60 more you can have a brand new car. my wife and i have a discover card that sends us checks every so often to use at places we cannot charge. the newest promotion is 0% interest for the life of the balance and all you need to do is charge $25 a month and make the minimum payment of 2% of balance. 0% FOR LIFE!!!!

 

[Bobblehead]

I'd like to get a relatively inexpensive car that I know how to fix. I'm thinking of looking for a 95-00 corolla. Here's the problam. I expect it'll cost me around 4k. I don't have the cash to pay up front and as far as I know you can't get a car loan for less than about 8k.....or can you? Have any of you found a way to get around this problem?

You should be able to get any type of loan amount if you go to the right source. Some others have mentioned using 0% loans from a credit card. If you are an expert at that game (meaning I don't even have to explain it to you) it can be a way to avoid paying interest as long as you can keep the amount bouncing around on 0% cards while you pay it off as quickly as possible.

Your local credit union is likely the best place to start looking for a loan. Usually you're eligible for at least one based on where you live. They may require that you open a small deposit account (bank account) with them but beyond that very little. You can also try USAA if you are military affiliated in any way (required for their loan and insurance products, but not their banking products).

"Doctors loans" of varying kinds may be another option but read carefully. A lot of these companies take advantage of the fact that medical students and residents are very naive when it comes to money and will try to pull various tricks with the interest rate, early repayment penalties, etc. Read carefully and if anyone ever expects you to sign "right now" vs. being able to think about it for a day at least, walk away.

Regarding leasing, as you've recognized leasing can be a pricey option that may limit you in other words. New cars cost more to insure. A lease will almost certainly require collision insurance. A car loan on a used car may also require it but what'll cost more for collision insurance? A 2006 model or a 1998 model? What about milage restrictions?

The Motley Fool has a useful car buying guide here: http://www.fool.com/car/car.htm?source=PFinAg

Their message boards (can read for free, just can't post, at least for your 30 day trial) give you a lot of useful information on leasing as well.

 

[NRAI2001]

If someone had a nice car during residency, would it make the attendings jealous? I ve heard that attendings and PDs in general are very bitter and jealous people?

 

[Laryngospasm]

If someone had a nice car during residency, would it make the attendings jealous? I ve heard that attendings and PDs in general are very bitter and jealous people?

If you drove new Ferrari F430..and your rainy day car was a Hummer H1 then maybe

 

[14022]

If someone had a nice car during residency, would it make the attendings jealous? I ve heard that attendings and PDs in general are very bitter and jealous people?

I actually barely passed my surgery rotation because my attending was jealous of the sweet cruise control and keyless entry system I had in my Dodge Neon. They already rejected me from interviewing at my home institution for residency. I should have just kept my toyota tercel.

 

[NRAI2001]

If you drove new Ferrari F430..and your rainy day car was a Hummer H1 then maybe

 

[NinerNiner999]

Three ideas for you:

IF you are buying a home, take out a HELOC or home equity loan for $4000. It will be fiinanced over a 15-30 year period ($50 per month). You may also be able to negotiate a payback from your home closing if the house you buy is sold for less than it is appraised for.

IF you are eligible, get a residency application and relocation loan (typically up to $10,000 with a low rate, financed over 10 years).

You may also be able to wait for you tax return next year and buy a car with your refund.

 

[f_w]

Go to a credit union. Many hospitals with residencies have a deal with a credit union for their residents.

What worked for me was going to lendingtree.com. The best offer was from a small credit union two states over.

 

[p54]

I'd like to get a relatively inexpensive car that I know how to fix. I'm thinking of looking for a 95-00 corolla. Here's the problam. I expect it'll cost me around 4k. I don't have the cash to pay up front and as far as I know you can't get a car loan for less than about 8k.....or can you? Have any of you found a way to get around this problem?

don't get a corolla, they are the most uncool, nerdy car you can buy
fyi: a corolla is the strongest chick repellant car u can buy, if u are single, definitely stay away from corollas

if u want cheap atleast get something fun or cool, get a used honda civic 2 or 4 door

 

[PatrickBateman]

Thanks everyone for the great suggestions. I'll check into the ideas you've all given.

 

[PatrickBateman]

don't get a corolla, they are the most uncool, nerdy car you can buy
fyi: a corolla is the strongest chick repellant car u can buy, if u are single, definitely stay away from corollas

if u want cheap atleast get something fun or cool, get a used honda civic 2 or 4 door

What?? Chicks dont' dig corollas?? You're joking right?

 

[p54]

What?? Chicks dont' dig corollas?? You're joking right?

nope, not even nerd chicks

 

[Trisomy13]

fyi: a corolla is the strongest chick repellant car u can buy, if u are single, definitely stay away from corollas

you've obviously never been in a used 1988 Volkswagen Fox. i used to get phone calls from girls i passed on the street telling me pre-emptively that they would never date me and my VW Fox.


these days it's all about the Heuliez Pregunta...

 

[Mirror Form]

Are you still in med school? Do you not require a car to make it to your rotations? Just take out 4k in extra stafford loans.

 

[Mumpu]

Unless my math is off, getting a new car for around $15K (Scion, apparently babe-proof Corolla, Civic) should be doable if your loan payments are deferred. You could get an American car (as in designed by a US company but built in Mexico or Canadeh, as opposed to a Japanese car built in US) cheaper but there's a lot to be said for realiable transportation.

Anyone remember the Will Ferell SNL skit? "I don't have to take this kind of crap from you! I drive a Dodge Stratus!"

 

[TommyGunn04]

Unless my math is off, getting a new car for around $15K (Scion, apparently babe-proof Corolla, Civic) should be doable if your loan payments are deferred. You could get an American car (as in designed by a US company but built in Mexico or Canadeh, as opposed to a Japanese car built in US) cheaper but there's a lot to be said for realiable transportation.

If you listen to people like Clark Howard (www.clarkhoward.com), buying a new car is a pretty poor financial move, especially if you don't have much disposable income. You're guaranteed to lose a substantial amount of money on a car purchase as soon as you drive it off the lot. Your best bet is to buy a car that's 2-3 years old, that way you'll reap the benefits of a new car (still under warranty, likely safer to drive, lack of expensive repairs, etc.) without taking the huge hit in depreciation that goes along with any new car purchase. I know it's a wonderful feeling to buy a brand new car and enjoy that lovely new car smell, but it's really a rather poor financial decision. It's interesting how many people buy brand new cars considering the massive amount of money that's typically lost on such a purchase. While a car purchase certainly isn't an "investment," it shouldn't be a massive money pit either. Ultimately it all comes down to priorities, but it's tough to imagine how anyone making $40,000 and carrying $200,000 in med school loans can justify the purchase of a new car, especially when one could buy some property and actually turn a profit in a few years.

With regards to the original poster's dilemma, I'll echo the credit union or local bank suggestions. The interest rate on a <$8k loan at a dealership, if they'll give you one at all, is almost guaranteed to be obscenely high. A credit union, on the other hand, is more likely to let you borrow a smaller amount, and it'll likely be at a reasonably good interest rate too.

 

[enigma1800]

On a similar note, what's the most (without ending up dead broke) that a person can afford for a car on a resident's salary, assuming they have no other debts whatsoever?

 

[Mumpu]

The problem with slightly used cars is the fact that most people can't swing 12 thou in cash to a private seller, and if you go to the stealerships you are in the same bind as with a new car.

 

[TommyGunn04]

The problem with slightly used cars is the fact that most people can't swing 12 thou in cash to a private seller, and if you go to the stealerships you are in the same bind as with a new car.

Not true! Privately, you can just as easily get a credit union loan, as discussed above. At a dealership you're only "in the same bind as with a new car" if you're dumb enough to pay their asking price! You need to be prepared to haggle a bit for what you know is a fair price. Just do some research on edmunds.com, nada.com, and other such sites, and come up with a reasonable price, then bring all of your data to the dealership. Having just done this myself, I can assure you that it's not all that difficult to get a fair deal on a slightly used car. I paid 25% less than their sticker price! This is in part because I was prepared to spend the weekend arguing about it, in part because it was the end of the month and they were desperate to make a sale, but mostly because I had done my homework and was prepared to see through their bull. And as I said, the big advantage is that the most significant amount of depreciation has already occurred in the first couple of years, so buying used allows you to still have a fairly new car without losing a huge chunk of your money when you drive it off the lot.

 

[NRAI2001]

What about a motorcycle? You could be the cool bad boy resident

 

[EctopicFetus]

What about a motorcycle? You could be the cool bad boy resident

1) Organ donors...

2) how about winter.. and rain.. ?