How to buy a car with no money.

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892002

Hi Everyone!

The medical school I'll be going to in August (Dartmouth) is in an area where you pretty much have to have a car to do anything. The problem is, I'm completely broke :laugh: ($5000 in debt, currently on food stamps/making <$5/hr as an AmeriCorps member/no savings).

I'd really like to buy a car before med school starts. My parents will not be able to contribute. Is there a way to use student loans to pay for a car? I know nothing about car loans. I think I have a decent credit score (740). For those of you in med school with cars, how did you afford it?

Thank You!!
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Taylor Swift said:
Hi Everyone!

The medical school I'll be going to in August (Dartmouth) is in an area where you pretty much have to have a car to do anything. The problem is, I'm completely broke :laugh: ($5000 in debt, currently on food stamps/making <$5/hr as an AmeriCorps member/no savings).

I'd really like to buy a car before med school starts. My parents will not be able to contribute. Is there a way to use student loans to pay for a car? I know nothing about car loans. I think I have a decent credit score (740). For those of you in med school with cars, how did you afford it?

Thank You!!
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Medical schools will only loan you money up to the COA (cost of attendance) for your school. So if you take $15,000 to buy a car, that's $15,000 you don't have for rent, tuition, food, etc. So that's not going to work.

You could get a private loan, but again you have no way to pay that private loan back for at least another 4 years, so that likely isn't going to work either.
 
chaim123 said:
Medical schools will only loan you money up to the COA (cost of attendance) for your school. So if you take $15,000 to buy a car, that's $15,000 you don't have for rent, tuition, food, etc. So that's not going to work.

You could get a private loan, but again you have no way to pay that private loan back for at least another 4 years, so that likely isn't going to work either.
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Yeah, that's what I figured 🙁
 
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If you have a 740, get a car for $10,000 like a Kia Soul for 0% interest; payments like $100/month for 5 years - cash back applied to purchase OR demand the cash be given to you and use that for books, etc.

https://cars.usnews.com/cars-trucks/best-car-deals

I am NOT a fan of financing cars just throwing this out there as an option.
 
I would advise against purchasing a car while in medschool without an income stream. If you have never owned/purchased a car before, be aware the costs associated with upkeep/maintenance/insurance can be overwhelming.

Just bear with the inconvenience associated with taking public transportation/uber/walking/biking while in school. It is less of a hassle than dealing with all that is required to own a car...
 
DV-T said:
I would advise against purchasing a car while in medschool without an income stream. If you have never owned/purchased a car before, be aware the costs associated with upkeep/maintenance/insurance can be overwhelming.

Just bear with the inconvenience associated with taking public transportation/uber/walking/biking while in school. It is less of a hassle than dealing with all that is required to own a car...
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I would normally agree, but Hanover is in a pretty remote area. No public transportation, no ride share, very few taxies, walking is not an option considering how far apart everything is/how cold it is in the winter. If I don't get a car, biking might work, but even that could be difficult during winter when it snows.
 
I understand. However, I am sure that other students there have made it work without having to purchase a car.

Besides, even with your good credit, I don't see how you will be able to acquire a car loan without a cosigner because the bank/financing company would require that you have income. And students who use schools loans to purchase a car are not making a wise financial decision because while bank loans can be discharged in bankruptcy, school loans can not.

Paging @HomeSkool for his financial acumen to share his POV on this...
 
I think you may have to wait until you get your loans.

Your credit would get you a loan for sure, but most places where I've bought a car asked me what my monthly income looked like, and that's where you're going to run into trouble. I think you're just going to have to bite the bullet and take a chunk of your student loan money, once you get it, to pay for a used car in full, and just make something work until then.
 
We JUST bought a car. You must submit your source of income to be approved for a loan. This would only work if you can get a co-signer and that you’re able to make the monthly payments, which will be tough if you’re paying that with loans.
 
siliso said:
You need a beater. A functional but old and ugly vehicle that can be obtained for less than $1k cash on the nail. This you can do with student loan money. Don’t get into any buy here pay here predatory stuff.
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My first car was a beater. And still running now.
 
Do you need to prove income the whole time or just to get the loan? If you have a job still now couldn't you get the loan a little bit earlier before your income stops/school starts?
 
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Ad2b said:
If you have a 740, get a car for $10,000 like a Kia Soul for 0% interest; payments like $100/month for 5 years - cash back applied to purchase OR demand the cash be given to you and use that for books, etc.

https://cars.usnews.com/cars-trucks/best-car-deals

I am NOT a fan of financing cars just throwing this out there as an option.
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Normally not a fan of buying a new car but this option may be the best for you. (Speaking as someone who's always driven semi-beaters and has never bought a new car.) I think you're right that in Hanover you'll need a car. I think you have two choices:

1)Use the small job/earnings and good credit score now and see if you can get the Kia Soul or similar with a loan. $100 a month payments are possible using your COA for repayment.
2) Buy a $2000 car from your first-year COA funds and pray that it doesn't need a $3000 transmission or new engine or whatever in the first year or two. Save $3000 from each year's COA to save for that year's potential repair bill. If you don't have to use it, at the end of Med School you can use the $9000 for your next beater and/or moving expenses for residency.

Unexpectedly, then, the Kia may be the less risky route if it has a warranty. You could also look for warranty used cars but they are rare and you'd want to do that near Hanover for convenience/repairs at the dealer.

If you don't have rotations or clinics or shadowing the first year and can live within walking distance to the school/grocery stores, you might go without the first year and buy one the second year.

Don't you get a stipend from Americorps that you can use toward education? Maybe you can use that toward tuition and still have some of your loan funds as extra. Depends on the school how they work the COA award.

If you're going to buy used, check with local mechanics - sometimes they'll take a car in trade to fix up and and then sell it. And I've had several relatives give away really old beaters so check with relatives.
 
precisiongraphic said:
Normally not a fan of buying a new car but this option may be the best for you. (Speaking as someone who's always driven semi-beaters and has never bought a new car.) I think you're right that in Hanover you'll need a car. I think you have two choices:

1)Use the small job/earnings and good credit score now and see if you can get the Kia Soul or similar with a loan. $100 a month payments are possible using your COA for repayment.
2) Buy a $2000 car from your first-year COA funds and pray that it doesn't need a $3000 transmission or new engine or whatever in the first year or two. Save $3000 from each year's COA to save for that year's potential repair bill. If you don't have to use it, at the end of Med School you can use the $9000 for your next beater and/or moving expenses for residency.

Unexpectedly, then, the Kia may be the less risky route if it has a warranty. You could also look for warranty used cars but they are rare and you'd want to do that near Hanover for convenience/repairs at the dealer.

If you don't have rotations or clinics or shadowing the first year and can live within walking distance to the school/grocery stores, you might go without the first year and buy one the second year.

Don't you get a stipend from Americorps that you can use toward education? Maybe you can use that toward tuition and still have some of your loan funds as extra. Depends on the school how they work the COA award.

If you're going to buy used, check with local mechanics - sometimes they'll take a car in trade to fix up and and then sell it. And I've had several relatives give away really old beaters so check with relatives.
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Wow! Thank you for the advice!! I just applied for a loan. Hopefully it goes through! And YES! I completely forgot about the $5,000 AmeriCorps scholarship! I’ll need to do more research, but if it can be put towards a car, that would be wonderful!
 
Taylor Swift said:
Wow! Thank you for the advice!! I just applied for a loan. Hopefully it goes through! And YES! I completely forgot about the $5,000 AmeriCorps scholarship! I’ll need to do more research, but if it can be put towards a car, that would be wonderful!
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Good luck! and check with the school like @drdpmn says above. Ask if they can add the cost of a car to your COA for year one or if the AmeriCorps payment can go toward tuition without reducing your COA award.
 
Why do you need to buy a car? Just lease one. You can get a medical school private loan from Wells Fargo and not have to worry about paying it until after you graduate school (check the policies). Get enough to cover the monthly for the four years. (Also, can you live near campus the first 2 years during your didactics? And just get a car for clinical?) You're not the first or last person to take out a private loan, I don't know why people on this website are so worried about this. I'm going to have to take out private loans too. Several of my friends are going to as well. It's just unavoidable when you come from a low-socioeconimc background, go to a school with high tuition, have CC debt, AND you're relocating (this is me as well). I know it's not ideal, but what other option do we have? This system wasn't built in consideration of students like us. Don't sweat the small thing. Just get the private medical school loan and call it a day 🙂 You already have enough to worry about in medical school. Good luck!
 
I'm in a similar situation as well. My car is 18.5 years old so obviously I cannot continue to use it in medical school.
 
CloverBale said:
Why do you need to buy a car? Just lease one. You can get a medical school private loan from Wells Fargo and not have to worry about paying it until after you graduate school (check the policies).
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Unless you pay for a car up front, the nitty gritty behind financing the purchase of a car or leasing a car is the same. (Although a car lease can be cheaper in many cases).

The private loan for a car is a good idea depending on the interest rate. But, fed loan, private loan or scholarships it all comes down to COA and an individual’s yearly financial aid budget. You can only bring in so much aid. Although, a student’s budget can be increased in a few ways by working with the fin aid office to see how to qualify for specific increases.

boogiecousins94 said:
Do you need to prove income the whole time or just to get the loan? If you have a job still now couldn't you get the loan a little bit earlier before your income stops/school starts?
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Just at the time of obtaining the loan. A lot of times if you’ve financed with the company before they don’t even ask for income verification the next time around. That doesn’t help in the OPs situation though.
 
CloverBale said:
Why do you need to buy a car? Just lease one. You can get a medical school private loan from Wells Fargo and not have to worry about paying it until after you graduate school (check the policies). Get enough to cover the monthly for the four years. (Also, can you live near campus the first 2 years during your didactics? And just get a car for clinical?) You're not the first or last person to take out a private loan, I don't know why people on this website are so worried about this. I'm going to have to take out private loans too. Several of my friends are going to as well. It's just unavoidable when you come from a low-socioeconimc background, go to a school with high tuition, have CC debt, AND you're relocating (this is me as well). I know it's not ideal, but what other option do we have? This system wasn't built in consideration of students like us. Don't sweat the small thing. Just get the private medical school loan and call it a day 🙂 You already have enough to worry about in medical school. Good luck!
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What interest are you paying on those private loans? The Wellsfargo website states that fixed interest can be up to 10.18% while variable interest can be up to 9.32% (no clue why variable interest has a lower maximum rate). Before taking out private loans, you should check with your school's financial aid department, enumerating exactly what necessary expenses you additional loans for, to see whether they can increase your COA,

EDIT: Also wells fargo states that you can only borrow up to the COA minus financial aid, so what good does that serve med students, who can use gov loans to cover COA?
 
DubbiDoctor said:
What interest are you paying on those private loans? The Wellsfargo website states that fixed interest can be up to 10.18% while variable interest can be up to 9.32% (no clue why variable interest has a lower maximum rate). Before taking out private loans, you should check with your school's financial aid department, enumerating exactly what necessary expenses you additional loans for, to see whether they can increase your COA,

EDIT: Also wells fargo states that you can only borrow up to the COA minus financial aid, so what good does that serve med students, who can use gov loans to cover COA?
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My particular med school won’t budge unless it’s for child care and laptop.
 
CloverBale said:
Why do you need to buy a car? Just lease one. You can get a medical school private loan from Wells Fargo and not have to worry about paying it until after you graduate school (check the policies). Get enough to cover the monthly for the four years. (Also, can you live near campus the first 2 years during your didactics? And just get a car for clinical?) You're not the first or last person to take out a private loan, I don't know why people on this website are so worried about this. I'm going to have to take out private loans too. Several of my friends are going to as well. It's just unavoidable when you come from a low-socioeconimc background, go to a school with high tuition, have CC debt, AND you're relocating (this is me as well). I know it's not ideal, but what other option do we have? This system wasn't built in consideration of students like us. Don't sweat the small thing. Just get the private medical school loan and call it a day 🙂 You already have enough to worry about in medical school. Good luck!
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Wait, I specifically ask my medical school about getting private loans so I could cover my current car payments and other debts I have, and the financial aid office told me that if I do get private loans that they would adjust/reduce my federal loans so that the total amount of aids I have equals the COA. Or can you get private school loans without the school knowing?

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CloverBale said:
My particular med school won’t budge unless it’s for child care and laptop.
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What private medical loans are you using? Those wells fargo loans only cover up to COA - provided by the school - minus financial aid.
 
DubbiDoctor said:
What private medical loans are you using? Those wells fargo loans only cover up to COA - provided by the school - minus financial aid.
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I think it's called like madcap XTRA or something. But look around this website, people talk about private loans all the time here. I'm not too crazy familiar with it.
 
CloverBale said:
I think it's called like madcap XTRA or something. But look around this website, people talk about private loans all the time here. I'm not too crazy familiar with it.
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Yes, this (Medical Residency Relocation Loans | Wells Fargo) does not seem to be tethered to the school's declared COA. But the interest rates are quite high, around 9.5%, and are only available for interviewing costs 4th year, relocation costs after med school, or board prep second year (or presumably third year should you take step 1 after core rotations). There doesn't seem to be anyway to add on, say, an extra 10k for M1 through private loans if your med school refuses to raise your COA. Maybe @HomeSkool knows more.
 
lenspx said:
Wait, I specifically ask my medical school about getting private loans so I could cover my current car payments and other debts I have, and the financial aid office told me that if I do get private loans that they would adjust/reduce my federal loans so that the total amount of aids I have equals the COA. Or can you get private school loans without the school knowing?

Sent from my SM-G950U using SDN mobile
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Exactly. I reiterated this above as well. You could get a personal loan that would be disbursed straight to you and NOT be added to your fin aid award, but it’s unlikely to find one that you can defer payment on until graduation.

Also, from what I have observed, students that take private loans usually fall into one of the following situations. 1. The private loan has a lower interest rate than the fed loans offered 2. they or their school are not currently eligible for fed loans 3. they have maxed out on fed loans and need to close the gap with private loans. There are likely situations I am not aware of and I am interested in learning more about this, but I know for sure any aid disbursed to the institution on a student's behalf is heavily contingent on the COA. When a student is over budget schools will reduce institutional aid in that amount or send loans back to the lender if the budget can't be increased further.
 
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Taylor Swift said:
I would normally agree, but Hanover is in a pretty remote area. No public transportation, no ride share, very few taxies, walking is not an option considering how far apart everything is/how cold it is in the winter. If I don't get a car, biking might work, but even that could be difficult during winter when it snows.
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(Haven’t read all replies so maybe this was said)..
Find a roommate with a car and pay them what you can to use it sometimes and get rides with them. When you need your own in a few years, hopefully you’ll have enough saved in extras from loan money you didn’t use.

Also, have you let family and friends know you really need one? Just getting the word out for next time they want to sell and upgrade could help.

(Very unlikely but possible) if you know any funeral directors, hopefully their companies like to replace vans often like someone’s parents boss that I know - the funeral director was able to buy the old work minivan for $1000. Anyone you know in a workplace with company cars may be able to buy one for cheap like this and resell it to you.
 
boogiecousins94 said:
I had a honda that was 14 years old with 300,000+ miles thing was a tank
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Agreed. T Swift needs to get an old Honda Civic for cheap. That’ll last you straight to residency for sure, and it’ll only cost you a grand or two.

How do you plan on paying for insurance, gas, oil changes, etc?
 
If you need an extra something to purchase a very elderly toyota (you want to do this private transaction, car lots overcharge for old vehicles) you can talk to your school financial aid office regarding a Professional Judgment adjustment to your COA, might get some assist. But only if it really is necessary and not just convenient to have a private vehicle.
 
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Taylor Swift said:
Hi Everyone!

The medical school I'll be going to in August (Dartmouth) is in an area where you pretty much have to have a car to do anything. The problem is, I'm completely broke :laugh: ($5000 in debt, currently on food stamps/making <$5/hr as an AmeriCorps member/no savings).

I'd really like to buy a car before med school starts. My parents will not be able to contribute. Is there a way to use student loans to pay for a car? I know nothing about car loans. I think I have a decent credit score (740). For those of you in med school with cars, how did you afford it?

Thank You!!
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Do you have a coat hanger?
 
Update: So OP, my school is giving us about 15,000k for “housing” and I just spoke to two M2s and a M1 who bought a car and was told to use the remaining amount for a lease. They said that’s what students commonly do when having to purchase a new vehicle and no one has ever encountered issues doing so. In reality if you have 1-3 roommates the monthly rent + utilities is drastically less than 15k so you’ll have a couple of grand extra for a car + maintenance. Then there’s the transportation fees that can be utilized in conjunction as well. None of this requires a readjustment of COA or private loans. Fortunately, I’ll be in my parents insurance but I would make sure to take that into consideration as well. You can find a used 2010 Toyota Camry SE/LE for 5-6K. If you go back even a year or two then it’ll be even cheaper without passing the decade mark.
 
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tekkenman11 said:
Update: So OP, my school is giving us about 15,000k for “housing” and I just spoke to two M2s and a M1 who bought a car and was told to use the remaining amount for a lease. They said that’s what students commonly do when having to purchase a new vehicle and no one has ever encountered issues doing so. In reality if you have 1-3 roommates the monthly rent + utilities is drastically less than 15k so you’ll have a couple of grand extra for a car + maintenance. Then there’s the transportation fees that can be utilized in conjunction as well. None of this requires a readjustment of COA or private loans. Fortunately, I’ll be in my parents insurance but I would make sure to take that into consideration as well. You can find a used 2010 Toyota Camry SE/LE for 5-6K. If you go back even a year or two then it’ll be even cheaper without passing the decade mark.
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I see! That's good to know! I think I'll really need to see my financial aid package before making a decision!
 
Yeah an old Toyota or Honda is the way to go. Don't lease a car, buy a cheap one and drive it into the ground. Should be doable to survive on 2k less than the max cost of living allotments for at least the first semester.
 
Taylor Swift said:
I see! That's good to know! I think I'll really need to see my financial aid package before making a decision!
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They’ll give you enough aid for the schools cost of attendance, so looking at what they allot for housing and what you actually will use (rent and utilities of place you pick) should let you know this difference in spending AKA what you can spend on a car, shouldn’t it?
 
The people at my school who were in the same position (no cash and parents with limited income) all leased a small car. There wasn’t really a need for a car in the first 2 years as there was ample housing within easy walking or biking distance. They usually got one some time in 2nd year. You get something safe and reliable that will get you through into internship. Sometimes routine maintenance is included and of course it’s under warranty to cover any big repairs that would sink you. If you absolutely need one right away when you start just be aware that if you get the standard 3 year lease you’ll have to change it out while still in school and may be hit with significant fees if you have extra wear and tear, etc.
There’s nothing wrong with a used car, but you could spend ~$4k on something you think is reliable thats maybe 6 years old with 80k miles and just have bad luck and drop a transmission or something that will set you back another 3k or so. That’s fine if you can somehow afford to take that risk, but I wouldn’t if I were you.
Find a small car, maybe one of those new micro SUVs for a little extra flexibility, and see what the lease comes to. 4WD might be worth the $$ up there. Every third car on the road in NE is a Subaru!
Your COL is probably reasonably generous and you should be able to carve out 200/month for a lease and insurance by saving on cheaper rent, etc.
PS stick with something like Toyota or Honda which should have a good residual and skip the trendy new Fiat, Alfa, etc.
Good luck.


--
Il Destriero
 
Terror Billy said:
Have to reiterate the Toyota and Honda love. Those suckers drive well into the 200,000 mile range, hopefully you can find one in the 2-3k range
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Agree. My first car was a Honda that I drove until it had 240K miles on it and then I sold it, to someone who intended to keep driving it. My current car is a Toyota with 215K miles and I intend to drive it into the ground. The main consideration is that these cars tend to require more expensive repairs as parts hit their life expectancy one after another. So if you go that route have some money set aside when it requires work, because it will.
 
You have $5000 in credit card debt? Is there anyway you can declare bankrupcy and get rid of that debt? I think this is the more important thing at hand to take care of than getting a car...
 
Where do you live? Here in California, I was able to get a 2004 Honda that was in pretty good condition for $1200. Toyotas are excellent choices too. My friend had a 1997 Toyota as his first car in high school and he said he'd buy a new one when it died on him. He's now 30 years old and an executive at his company, still driving this 1997 Toyota because it just WONT DIE!!! My point is, get a cheap Toyota or Honda.

And I know this might be annoying to some of your friends, but start a GoFundMe? Or if your bday is coming up, request your friends to chip in at least $20 per person? These fundraising techniques may not cover the total cost but will certainly help, esp if you aim for a $1000-$2000 car.

Or tutor some kids through wyzant to earn some $ between now and start of school. I did this for half a year and was getting paid $60/hour. Parents love to hear that you'vr been accepted to medical school and will be willing to pay you that much, esp if youre willing to travel a bit further to make service area in wealthy neighborhoods. If you PM me I can give you a few tips.

Or ride share with your future roommate. Offer to split gas 🙂
 
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Definitely see if you can get an old Toyota. Mine is 11 years old with about 130K miles on it and runs just fine, though I was lucky that I had a parent who told me to leave my key with them while I was out of town "because they wanted to take it to the car wash for me" and then paid over $500 to have my brakes taken care of. You'll unfortunately run into big, often unexpected expenses like that with any car, though. Many people with experience with Toyotas have told me I can probably hang onto that car for least another 10 years and likely more than that. I got it years ago for $10K, so I did finance it, but I'm sure the price would be significantly less if I were just buying it today.

Once you find a car, try to avoid driving it as much as you can. Every time you take your car for a joy ride, you're risking blown-out tires, wrecks, random things that decide just to break because wouldn't that be fun, and all kinds of other things that can go wrong and wind up costing you money or losing your car all together.
 
fourandtwo said:
Where do you live? Here in California, I was able to get a 2004 Honda that was in pretty good condition for $1200. Toyotas are excellent choices too. My friend had a 1997 Toyota as his first car in high school and he said he'd buy a new one when it died on him. He's now 30 years old and an executive at his company, still driving this 1997 Toyota because it just WONT DIE!!! My point is, get a cheap Toyota or Honda.

And I know this might be annoying to some of your friends, but start a GoFundMe? Or if your bday is coming up, request your friends to chip in at least $20 per person? These fundraising techniques may not cover the total cost but will certainly help, esp if you aim for a $1000-$2000 car.

Or tutor some kids through wyzant to earn some $ between now and start of school. I did this for half a year and was getting paid $60/hour. Parents love to hear that you'vr been accepted to medical school and will be willing to pay you that much, esp if youre willing to travel a bit further to make service area in wealthy neighborhoods. If you PM me I can give you a few tips.

Or ride share with your future roommate. Offer to split gas 🙂
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Thanks for the advice! I live in DC! I'm probably going to spend the summer working at Papa Johns! It's something I've always wanted to do lol. It doesn't pay as much as tutoring, but I think I'll be able to save up a bit!
 
Taylor Swift said:
Yeah, it was from this year's med school application cycle lol. I'll look into that!
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Just be careful. Declaring bankruptcy can hurt your credit. It can drop your nice 740 into the low 600s or even into the 500s. It goes away with time, but it takes a while. Don’t **** up your awesome credit, because it takes a while to build it back up.
 
You can definitely use student loans to pay for a car. Cost of attendance includes things like transportation. Just keep in mind that buying a car outright is an idiot move, Lease something affordable and you will be fine.
 
You can get a reliable older used small sedan, such as a Hyundai Accent, for 2-3k private sale. Use your loans for that. Search craigslist.
 
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