Going Into Debt For A Car.

[KezR33]

Long story short, I need a new car. I'm on my P's, but I'm allowed turbo cars so long as they stay within the 125kw per ton limit.

I previously owned an R33 non turbo, nice car, but I don't want another. So I'm currently looking at;

NA Supra (~$10,000-15,000)

200sx S15 (~$16,000-24,000)

Or just save my money and grab something below 10 grand.

I have about $7,000 saved up, and earn about $300 a week (full time student). I live at home, and have no other debts or bills beyond the occasional $30 phone recharge. I'm going to be studying for at least two more years.

Basically, I really want a turbo charged car, but all the cars within my budget are very, very old (R32's, S13s, etc). I could snag a pretty stock Supra for cheap and cruise around in that for a few years, I've always loved the way they look, but I hate the interior, it's so dated. Plus, the risk of getting a lemon goes up with age.

On the other hand, I love the S15, always have. It's turbo charged, relatively new, and reliable. Plus, I could see myself driving an S15 for a long time, rather than the Supra which I'd probably sell in 15 months for a turbo car. It would mean going something like $10,000 (or even $15,000 if I buy one with a kit, rims etc) into debt. Over a five year loan that's no big deal per week, I can easily pay it, and I'm sure I could hammer the debt down quite rapidly over summer breaks etc.

But it's still debt. I don't like debt. It's a dirty word.

Does anyone have any experience with this? I'm sure plenty of people have gone into debt at a young age over a car. Regret it? If so why?

Thanks for any input.

[Al]

Going into debt, while still a full time student, is a VERY bad idea. You may have a job this week, but being a part-time/casual employee you are basically dispensable.

Also going into debt for a performance car, is also not good. Can you afford full comp insurance ($1500+/yr), regular servicing, replacement parts (should anything break, blow, etc).

Without a full time job, do whatever you can to stay debt free!

[KezR33]

Going into debt, while still a full time student, is a VERY bad idea. You may have a job this week, but being a part-time/casual employee you are basically dispensable.

Also going into debt for a performance car, is also not good. Can you afford full comp insurance ($1500+/yr), regular servicing, replacement parts (should anything break, blow, etc).

Without a full time job, do whatever you can to stay debt free!

I'm not so concerned about losing my job, even in this economic crisis. I work for a big corporation (lots of other people to sack), and my managers love me. Plus even if I did lose my job I have an excellent resume. With regards to part time/casual customer service jobs at least.

I'm also aware of the maintenance and insurance costs of a performance car having owned a '93 R33 (which did have a few hiccups).

I dunno. I have a mate who's a bit older than me, and he kicked around forever in cheaper cars (R33's, Silvias, etc). Then about a year ago he though bugger it and bought a freshly imported Evo VII. Hasn't regretted it at all. It cost him a lot, but he says he'd much rather invest in a nice, reliable car he loves and will keep for many years, rather than settle for something within his current price range and constantly yearn for something else.

Then again, you're probably right. Damn easy loans and their temptation.

[Roy]

If the numbers add up then no biggie grabbing a loan for a car. Hell as a Jr Engineer i was earning about $300 a week when i bought my old SR20 Pulsar.

Loans are not all that evl provided you are sensible about what you borrow. Hell it teaches you some self control and responsibililty behind the steering wheel when you see $100/wk of your hard earned draining yoru account for the pleasure of driving the car.

Buy sensibly, treat it will and if yo uget in a bind you can always flog it off.

[JGTC]

Hey there, my dad is helping me to get a loan, i've been looking for a car no for a better part of 12 months and ive finally found one =D its a Black NA R34 Manual - $16400, the interest for the loan will go down from 6% to 5% so it works to be about 80 a week. But yeh i'm 19, work a part time job at KFC (LOL don't diss) and do full time uni, and i just started my managerial training to try and concrete my job so yeah. I'd only recommend that you don't go by finance, go via a personal loan just incase u want to sell it prior to completing your loan.

Hope that give you some insight if any,

Danny

[jrm]

That's a crazy low interest rate ..

[The Bogan]

Just remember cars break and always save extra and have a slush fund available for repairs, rego, insurance, servicing, Should be about $3,000 a year minimum.

Thats my 2 cents to start it off.

[predator]

You still live at home, don't worry, your parents will pay the loan off if you lose your job..

[aaasaint]

Just remember cars break and always save extra and have a slush fund available for repairs, rego, insurance, servicing, Should be about $3,000 a year minimum.

Thats my 2 cents to start it off.

I agree. Make sure you don't leave yourself short. There are a lot of hidden costs. Be realistic with how much you can spend, save etc.

[SECURITY]

the older guys will tell you not to go into debt for a car because it just doesnt stop once you've started (which delays everything later on). the younger guys will tell you to go for it if its within your budget. best way is to look at your current situation and see if you can afford it, and if you can, are you looking at making any other major purchases within the time you get to pay the car off? (i.e. house, move out, and if you buy a GTR - a rebuild).

if you've got 2yrs left you'll be looking for a full time or a 4-day-a-week job in your field in around a year and doing uni at night (they usually allow for this in your last year of most courses) so wait till you've gotten to that point so you at least have a more solid cash flow.

[Jax]

1. It's not really a good idea in theory. If person 1 bought a car they could pay for now, and kept doing that, while person 2 borrowed to buy something " better", now, then it stands to reason, that at any given time in the future, 2 years - 5 years - 15 years, etc., then person 1 will always be able to own a better car than person 2, as person 1 must have more money to spend on cars, as he's never paid any interest, and can use that money to buy cars.

If you want more " things', cars or otherwise, then just delay the first buy, borrow nothing, and as time goes on you will have more and better "things" than those around you.

2. I think I detect that you really want to borrow and buy now, and you just would like some people to say it's OK?

Betcha you borrow and buy !!

[Bluprint]

Having been there myself, all I can say is "never again".

[Count Grantleyish]

KezR33

My words of wisdom.

If you can afford the repayments, you're smart with money, can afford the maintaince and have solid job security, go for it. It can build a solid credit rating should you pay the repayments everytime.

Also like someone said, better save up a bit more for emergency repairs or expense (excess, rego and damage that replacing said damage is lower than the insurance excess).

If you're familiar to the maintance of Skyline, you should have some idea of maintaing Silvia or Supra.

If i were you, I'd wait until you're off your P's and choice of cars will open up a lot (could pick 34 GT-T for same money as S15 nowdays), just a thought also perfect excuse to save up more cash for mods.

All the best with the decision.

Cheers

[KezR33]

2. I think I detect that you really want to borrow and buy now, and you just would like some people to say it's OK?

To be honest that's what I really do want to hear, but I'm not so foolish as to ignore the advice coming from the other side either.

I like the advice the last guy said. I love the S15, but I think I'd be more content with an R34 GT-T, TT Supra or maybe an Evo 6. My full license isn't that far off.

The really smart thing to do would be to try and find a reliable cheap car to putt around in and hope nothing in it goes wrong, and save up for the next 15 months, but the reality is I'll probably snag a stock Supra for under $10 and just enjoy it till then. They re-sell pretty well anyway. It'd be a good test too, put away $150 a week and try to maintain/insure the Supra on top.

Thanks for the advice guys, will think about it.

[Roy]

1. It's not really a good idea in theory. If person 1 bought a car they could pay for now, and kept doing that, while person 2 borrowed to buy something " better", now, then it stands to reason, that at any given time in the future, 2 years - 5 years - 15 years, etc., then person 1 will always be able to own a better car than person 2, as person 1 must have more money to spend on cars, as he's never paid any interest, and can use that money to buy cars.

If you want more " things', cars or otherwise, then just delay the first buy, borrow nothing, and as time goes on you will have more and better "things" than those around you.

2. I think I detect that you really want to borrow and buy now, and you just would like some people to say it's OK?

Betcha you borrow and buy !!

Fark me...good advice for sure. BUT, as a person who has cheated death or at least serious handicap twice before 25 then fark it. Sure buying anything at any time in your life will make you poorer then a guy that banks his money. Its no sin or crime to borrow some money that is well within your means if it means enjoying a few things now. You never knwo whats around the corner.

If yo uneed to hear that its ok then I will say it is ok. Sure he will end up paying more for a depriciating asset, but so what. I eat nice food which is a waste of money relative to the fact that i could largely eat toasted cheese and tomato sandwiches for 15% of the cost. You work to live and provided you are not leaching off friends and parents to do something you cant afford...then go for it

[Modena]

With interest rates this low, I would be thinking about buying a house or at least saving up for a deposit. Wait a few years then use equity to buy yourself a newish car or another property.

I know you dont work full time so you may struggle to get a house loan but buying a pricey car when you are still on minimum wage is not the best idea.

I borrowed 5 K while working casually and studying, let me say I will not do it again. I paid it back within 11 months but I paid way more than 5 K back to them.

Stay car free if you can, use your mums car. Then once you graduate and get a proper job... go nuts.

Dont look for the easy way, esp when it comes to money. If you bust your balls now, save and invest for the long run, you will reap the benefits later on.

Car debt is bad, home loan debt is good (as long as your property grows in value). Cars depriciate, houses (land content) appreciates.

Edited February 12, 2009 by Modena

[.:: GimpS-R34 ::.]

Another thing to take into account.. especially in todays market.. fair enough you could save and buy outright without borrowing from the bank.. and the bank will see this asset for any future investment.. but the banks also like credit ratings.. and one of those credit ratings is borrowing money and showning that you can consistantly pay it off.. some of the people i know (personally) have not ben able to get loans for a house cause they paid for everything outright with cash, and they even had deposits.. Now i'm not saying it's impossible to get a house loan without it (so don't flame) but the banks do look into account that you are able to borrow money and consecutively pay it off..

This doesn't mean go borrow $20k to buy an Evo.. It's just something to keep in mind down the track..

[Modena]

Another thing to take into account.. especially in todays market.. fair enough you could save and buy outright without borrowing from the bank.. and the bank will see this asset for any future investment.. but the banks also like credit ratings.. and one of those credit ratings is borrowing money and showning that you can consistantly pay it off.. some of the people i know (personally) have not ben able to get loans for a house cause they paid for everything outright with cash, and they even had deposits.. Now i'm not saying it's impossible to get a house loan without it (so don't flame) but the banks do look into account that you are able to borrow money and consecutively pay it off..

This doesn't mean go borrow $20k to buy an Evo.. It's just something to keep in mind down the track..

I guess banks do want to see some credit history that tells them you can repay money back.

But lending criteria has changed since October 08.

[Medium Dave]

Dont do it Man! I did and regret it - you will become a slave to the debt and the car!

From my experience, I got a loan to buy a car, and left the house till later. A mate of mine did the opposite, bought the house first then the car. At the moment I have no car and only just bought my first (small, cos thats all I can afford) house, and have to drive the wife's lancer. My mate has two houses, owned a collection of skylines and now a 350Z! and we are probably on the same kind of $$$

Edit: I did recently buy another skyline ( <- the gts4), but it was cheap and broken...

Edited February 12, 2009 by Medium Dave

[ras1983]

Dude, been there and doing that right now as I type. I took a loan for my GTR and I'm going into my final year of uni. I'm going to break it down for you, not to convince you one way or the other but to give you a reality check of the budgeting you'll have to consider.

IMO It all depends on how much of your income goes towards your repayments.

If you borrow 5-7K then repayments would generally work out to around $30-40 per week over 5 years (I'm going off the figures from a couple of years ago though so double check for yourself what the repayments will be). That's reasonable even if you're on youth allowance. BUT by the time you include petrol ($50-$70 easily), rego (~$10 a week), insurance (~$30 a week and that's a really consertaive estimate for a p-plater), scheduled maintenance (~$42 a week for 1 set of tyres @ $1600 a set and 3 minor services a year @ $200 per minor service).

That puts you at roughly at $162-192 per week.

Please note that I haven't included anything for emergency expenses here. Anything can go wrong on a car and you'll be surprised what sort of S*** goes wrong in life that will cost a lot of money to fix.

So that leaves you with a surplus of $108-138 per week so save and live off. That might sound like a lot of money but one un expected thing will make it REALLY tight for you.

My 2 cents.