purchasing a car

[ammd327]

I have been accepted to medical school for the Class of 2013. I currently do not have a car, but will most likely need one in the city where I will be attending medical school (no public transportation, cold and snowy winters that would make biking or walking impossible). I would be looking to get something used for $10,000 or under (hopefully under - $10,000 is the absolute maximum). I've been looking through some of the older threads on this forum and have learned that a lot of the loans typically associated with med school (Stafford, etc.) cannot be used for car payments. So does this mean I would just get a typical car loan like the rest of the world? Is there any way to incorporate this into the "living expenses" category of the regular student loans?

While I appreciate any advice anyone wants to offer, not getting a car is not really an option due to the living situation in this city. Even if I could, for example, get an apartment close enough to the school to walk, it's the type of city where the grocery store, mall, post office, etc. would not be in walking distance. So basically I will either need to drive to school or drive to these other various places.

Thanks in advance.

---

Members don't see this ad.

 

[TMP-SMX]

I have been accepted to medical school for the Class of 2013. I currently do not have a car, but will most likely need one in the city where I will be attending medical school (no public transportation, cold and snowy winters that would make biking or walking impossible). I would be looking to get something used for $10,000 or under (hopefully under - $10,000 is the absolute maximum). I've been looking through some of the older threads on this forum and have learned that a lot of the loans typically associated with med school (Stafford, etc.) cannot be used for car payments. So does this mean I would just get a typical car loan like the rest of the world? Is there any way to incorporate this into the "living expenses" category of the regular student loans?

While I appreciate any advice anyone wants to offer, not getting a car is not really an option due to the living situation in this city. Even if I could, for example, get an apartment close enough to the school to walk, it's the type of city where the grocery store, mall, post office, etc. would not be in walking distance. So basically I will either need to drive to school or drive to these other various places.

Thanks in advance.

Sounds like Detroit... Anyway, do you have any family/friends wanting to sell a used car? If not, perhaps you can find a good deal at a dealership or something. You don't really want to be making car payments with your loan money on a monthly basis. Unless you already have good credit it's unlikely you are going to get decent terms on a car loan and it is a bad idea anyway to be paying off a car loan with your school loans. It is possible, but not a good financial decision.

 

[dragonfly99]

I would try and go buy yourself a cheap used car...like $4 or $5k. You should be able to get something that will drive for that. If you must spend 10k, then OK, but know that you'll get ripped off on your car loan.
Transportation costs are factored into your student loan budget, but that's usually costs of gas, maintenance for a car, etc. and not really for car payments. You may be able to squeeze enough out of your loan payments to pay a car payment, particularly if you get a roommate or find other ways to save in your budget. I can tell you that I'm a fellow (currently) trying to pay off my student loans and I wouldn't personally go and buy a $10,000 car right now. If my 1999 car dies, I'll probaly go get a cheaper one than that...I'm trying to save right now so that if it does die, I can just go buy another used one for $7 or 8k. You just have to think about the fact that any money you borrow now is going to multiply into a larger amount by the time you pay it back.

One good thing about the crappy economy right now is that car dealers really want to sell cars...perhaps you can get them to offer you a very low interest rate car loan. However, the best is still to try and avoid borrowing any more money than you have to.

 

[potato head]

Unless you already have good credit it's unlikely you are going to get decent terms on a car loan

i have a similar question myself. i'm interested in purchasing a car before medical school.

is there any reason why students wouldn't have good credit? the last time i checked, my credit was a least decent.

and i'm not sure this matters, but i'm going to a texas state school, so my overall loans will be significantly lower (albeit, significant) than many med students.

 

[TMP-SMX]

i have a similar question myself. i'm interested in purchasing a car before medical school.

is there any reason why students wouldn't have good credit? the last time i checked, my credit was a least decent.

and i'm not sure this matters, but i'm going to a texas state school, so my overall loans will be significantly lower (albeit, significant) than many med students.

I have excellent credit through using credit cards for 5 years but still I wouldn't take out any car loans without any income. If you had some income it would be a different story. There isn't any kind of deferment with this type of loan and you will be paying off your car loan with 6.8%+ student loan interest. If you run out of student loan money you are going into grad plus at 8.5% or private loans (if you can get your CoA increased enough). If you can't get the CoA increased you will run out of money because you maxed out your loans. Then you'll end up having to return the car because you can't make full payments.

 

[Habeed]

Mr. Potato : calculate your annual expenses versus your annual living allowance money. I did this for the past year of school, and was able to fairly accurately see how I was doing financially. Believe it or not, but schools vary tremendously in how much money they give you to live on. And it doesn't always logically correlate with geographic area.

For instance, A&M gives you about $6k more a year to live on than the school I am at now in Chicago (where the living expenses are higher). Assuming you rent 1 room in a 2 bedroom and went to A&M, you would be practically rolling in dough in terms of funds that can be used to purchase a car. Texas Tech and UT : Houston were less generous.

Once you figure out your approximate budget, then you need to find the most cost efficient car you can. Supposedly, used Mazda Proteges are a good buy, because they are cheaper than Civics and Accords but are a very similar car.

Personally, from my browsing, I have noticed that cars below 10k tend to have a large markup if they are being sold by the dealer. This makes sense : a dealer than handles the car has a lot of fixed costs. So personally, I'm thinking that finding a low mileage Mazda protege that is approximately 6 years old is the way to go. Pay a mechanic a few hundred bucks to give it a bumper to bumper inspection before you buy it, of course.

Oh, and for coming up with the cash you need to buy the car upfront : well, personally, I would use cash advances combined with balance transfer credit cards. Yes, this method can be dicey if you don't know what you are doing, and it requires that you have some sweet cards from friendly credit unions that don't charge fees, but essentially it can get you the cash you need with minimal fees and interest.

I would do a cash advance of 5k from a USAA credit card I have that does not charge fees for cash advances (MANY cards do). Then, I would balance transfer to a different card that offered 0% interest balance transfers for 18 months. That would free up enough cash to buy the car. It would be 'as if' I bought the car a year later, once the student loan money all came through, but you get the use of the car much sooner.

Make sure to use the electronic payment features so that you always pay these cards on time : credit cards can be exploited, but it's like dealing with a tank full of cobras.

 

[potato head]

There isn't any kind of deferment with this type of loan and you will be paying off your car loan with 6.8%+ student loan interest.

For instance, A&M gives you about $6k more a year to live on than the school I am at now in Chicago (where the living expenses are higher).

I would do a cash advance of 5k from a USAA credit card I have that does not charge fees for cash advances (MANY cards do). Then, I would balance transfer to a different card that offered 0% interest balance transfers for 18 months. That would free up enough cash to buy the car. It would be 'as if' I bought the car a year later, once the student loan money all came through, but you get the use of the car much sooner.

thanks so much for the advice. i'll probably do more research and see what my student loans end up looking like over this spring, but it does seem my school may provide more money in CoA than i'm already used to living on today. i also have some money i could use upfront, so that may help decrease any car loan i may take out. and if all else fails, i'll just pay cash.