Hello,
I'm a college student at the University of Delaware. I really want to get a new car and take out a $10,000 loan to do so. I am curious if there are any loans that will hold payments for a few years until I were to graduate. I am an accounting major, so I'm assuming I get a job out of college and will be able to pay the loan almost no problem. As of now I have $10,000 but I would keep that in investments until the money were needed to make payments to the vehicles financing.

If there is another route I should take please someone help. The total value of car is $30,000. I currently have 8k and I drive an 98 A4 2.8Q which I would probably hold onto for daily driving bc its a long commute from North Jersey to UD.

I'm Willing To Listen To Any Input.


Thanks

 

You shouldn't spend money on vanity you don't have. Leveraging capital is one thing, you are borrowing money you already have but spending money you don't have with the expectation you will have it someday in the future to finance a frivolous purchase is going to end badly. It's a debt trap. Your education is an investment. Real estate is an investment. A business franchise is an investment. A car, unless it earns income is an expense and an unnecessary one.

I suggest you hold off on your plans, get your Jones in check and start earning income before you start spending it. A lot can happen which can affect your ability to pay the loan and/or you may have to sacrifice opportunities for your future all so you can drive a fancy car now. If you borrow the money and buy the car any hope of grad school, an internship or whatever has to be set aside to pay your nut.

Invest that $10K and drive that A4 into the ground. If you must have it you can buy a used S2000 for less than half the price of a new one.

 

alright... the way I think about things is that I'm young now so I woiuld prefer to have this car as long as it is financially possible.

My education is paid for already. I would still drive the A4 into the ground btwn the commute from NJ to DE but other than that I would like the IS for nice weather and occasional luxury. Starting salary for acct majors is about 45,000 which would be the car in one year after taxes. I have already had an internship for two different seasons...

If there are loans that let payments wait for a few years. I would be able to use that loan as the downpayment. For the finance payments, I would be dipping into my $8,000 on top of any money that I will earn/save until then. I figure that knocks $20,000 off the retail of it and my parents would give me a graduation present of about 6-7k for the final payment of the car... I am really not worried about retirement or housing... I plan on living at home for my first year or two out of college

 

I don't believe I've ever heard of a loan like that other then student loans. However, it sounds like your parents are paying for your education so you probably wouldn't qualify for a student loan anyway.

In my opinion I don't think it would really be best to make that kind of purchase without a full time job. It might not be the best thing to assume that a 45k/yr job will fall into your lap after graduation or that you'll get 6-7k as a graduation present. Who knows what might happen in 2-3 years, the job market might not be so great. good luck!!

 

A subsidized student loan for "education purposes" may work, they won't charge you interest until six months after you graduate. There may be provisions restricting you from using the funds for non-educational expenses but it doesn't hurt to explore this option.

It may not be something that you're worried about now, but it's definitely something to start thinking about. Trust me when you're out of school and working, you're going to want your own place.

 

[QUOTE=Bmahon,Apr 4 2007, 05:44 PM] I don't believe I've ever heard of a loan like that other then student loans. However, it sounds like your parents are paying for your education so you probably wouldn't qualify for a student loan anyway.

 

Re-read your two posts above, think about whether this sounds like a smart financial decision. You buy a car, definitely locking you into a liability (car payments). You're highly reliant on a projected job that is far from guaranteed. Additionally, you mention a $6-7k grad present, which is a little rediculous to rely on.

So you're effectively trying to figure out a way to squeeze a purchase of a $30k car with $8k, let's be realistic, does that alone sound like a smart spending habit? You'll still be young when you graduate, at which point will know (not think) you have a $45k job and a (very generous) gift from the parents. That to me sounds like a much better time for such a car purchase.

Also, remember if you lock yourself in a 5 year loan and you're only living at home a year, that's four years of both car payments and rent (because there is no way you're affording housing in northern NJ with a $45k job and only a year's worth of savings (less the car payments).

 

He could always just put it on credit cards and pay minimum payments until he gets more money