[beefjerky]

This is a little premature but I just signed the paperwork for a new job that starts in June. Currently I have no daily, and am driving around my autocross car. Let's get down to brass tacks:

After monthly expenses are paid, I'll have between 1700-2000$ disposable cash per month.

Car will be used for visiting construction sites and trips on occasion, but I'll be commuting to the office by foot/bicycle/bus (still need to secure an apartment but I will not be commuting by car).

So my question is, do I buy another 20 year old relic, or should I finance a used car that's somewhat newer? I want something that's manual, AWD, sedan/hatch/wagon, and I'm pretty informed on my options. But financially, is there any benefit to my credit to finance something? Or should I just save for a couple months and buy an early 2000s Subaru Outback? I'm really attached to the idea of ownership, but after a couple years I'd like to buy a house. My credit score right now is low 700s, and is based on rent payments and typical monthly bills. Could financing a used car help build credit? If I do payments I'd like to keep it under 300$ per month. Sorry if this is a dumb question, I'm not used to disposable income.

P4C:

 

[Jimmmmmmmmmmy]

Financing a car would help your credit score, but it probably wouldn't help you as much as having a larger down payment. Considering you're not going to be using it for commuting, I would just get another beater. It sounds like the car going to sit in your apartment parking lot catching door dings and getting dirty at construction sites.

My Boxster got hit into when I parked it outside my apartment. I was genuinly upset about it. I was so stressed about where I parked it after that. I would not recommend going. I never cared about where I parked my old Subaru. Thankfully, I have a garage now.

 

[kiznarsh]

I’m general paying off loans and credit cards on time helps build credit. Do that with smaller loans and set yourself up to be in a good situation when needing to finance a house.

 

[Raguvian]

Couple of thoughts:

- Where are you located? If you're in the rust belt, a 20 year old beater might be a headache with rust. I wouldn't want to be rolling around in a 20 year old Mazda 3/6 for example if it were subjected to two decades of salt.

- Given the state of the market, even true beater cars are now easily $3-5k and can be in especially rough shape. If you're in an apartment and don't have a means of working on your own car, a beater might nickel and dime you to death with labor costs at a mechanic.

Personally I've always gone the beater route as I live in California and don't have to deal with rust and have always been able to work on my own stuff, but even then I've gone the rabbit hole on cars by throwing an endless amount of parts at them to make them reliable enough to have the peace of mind to use them on a regular basis. I think for you, I'd just get whatever ~7-10 year old Civic/Corolla you can find with under 100k miles, put the amount you'd have spent on the beater down on the loan and finance the rest. You're probably looking at a $12-15k car or a $7-10k loan. Only issue is interest rates suck right now but even a $10k loan at 8% for 4 years is well under your $300 limit, and you could always pay it down quicker if you choose.

 

[fat biker]

Go to Credit Education | myFICO.
Look around, you're a smart guy, you'll figure it out.

Me? Beater.
You are in a powerful position to hoard cash.
New home ownership eats cash like you will not believe..

 

[Dandbest]

I vote another sh*tbox. You don't know where you'll live, what the parking situation is and if you will even like the job. Putting yourself in debt before you've even started isn't what I would do.

 

[2 doors]

You claim to have never had disposable income yet own a car that’s only used for auto cross?

 

[adam1991]

I'll go out on a limb here and suggest that you don't have much savings if at all.

Get an older appliance Corolla. And start saving--save for retirement, save for a down payment on a house, save for house repairs/maintenance, save for furnishing the house, etc.

 

[Surf Green]

ishtbox.

Build a slush fund.

 

[beefjerky]

You claim to have never had disposable income yet own a car that’s only used for auto cross?

Lived with parents and worked while I built that. Last 2 years I've been on a tight budget, eating ramen and taking student loans to support my addiction... I mean hobby (I finished the build before moving out. I've scraped together money to go to events while in university). I graduate in May so this will be my first time out of college where I'll be fully on my own financially

 

[bnkrpt311]

I know leasing rates aren't the best right now but is that an option? Could you lease an Impreza? One of the nice things about a lease is that it won't show up as debt when you start the home buying process.

 

[MandatoryOutsidePossum]

Keep in mind a drivable ****box now is a $10k car.

 

[Stevo12]

Just search "irreplaceable Celica" for TFL recommendations.

 

[OOOO-A3]

In general paying off loans and credit cards on time helps build credit. Do that with smaller loans and set yourself up to be in a good situation when needing to finance a house.

Get a GOOD credit card. Preferably AmEx because their service is outstanding and they have a variety of cards with no fees. Figure out your budget, then pay for everything with the card AND PAY IT OFF EVERY MONTH. Do not - and I cannot stress this enough - carry a balance and pay interest. Set up autopay from your bank account to the card to pay off 100% of the balance every month. You can't put rent on a credit card, but utilities, mobile phone, internet, groceries, gas.... treat it like cash (don't spend it if you don't have it, don't carry a balance) but use it for everything you'd otherwise pay for. Your recordkeeping will be greatly simplified, your credit score will be fantastic (unless you f yourself by carrying a balance), and you will get tons of 'points' depending on which card you choose.

Keep in mind a drivable ****box now is a $10k car.

Exactly. And ****boxes require maintenance and have no warranty. Get the cheapest Mazda with a warranty you can find. Over a 3-ish year period you'll be better off and can make different choices later once you're established and have some money and work history. If this is a first job out of college, what you WANT in a car is 100% irrelevant. You're not in a position to be having wants. Be pragmatic now, worry about wants when you can afford them.

 

[mrothwell]

Keep in mind a drivable ****box now is a $10k car.

Yeah, this is kinda my hangup. Not a lot of cheap cars out there that wont have you working on them every weekend. Financing a new car isn't as bad of a deal as it sounds as long as you (1) keep it forever (2) maintain it, but not over maintain it (3) don't get destroyed on interest.

(3) might be tricky these days though, and especially for you since you're young. I'd check out your options though.

EDIT: any reason you can't just drive the autocross car? You're young, who cares if its stiff and uncomfortable? Maybe get a spare set of wheels so you don't wear out your stickys?

 

[Senior Member]

I'd finance a new Subaru WRX, base 6spd/

 

[Maximum_Download]

Your credit score and credit history is literally the most important asset you have when you are young. THe ability to demonstrate that you can take on reasonable debt, manage it and pay it off is how you build credit to buy said house.

Without that history, and only having small bills and rent, it's a harder story to tell despite the fact that your credit score is in the 700s.

When you take that and add to the need you have described, and knowing that an ishtbox is just as much of a risk as it is a convenience, I suggest buying a used but still nice reasonable used car, and paying it off over time.

This has a couple of upsides, but key among them is it keeps you away from said ishtboxes, and the sudden expenses they tend to hit you with that leads to credit card debt.

 

[ghost03]

Heavily financing a used car kind of seems like the worst of both worlds.

I would either get a @#$#box or else find some super ~$200/mo lease on a new Kia or something. You already have the autocross car for fun; don't really need to find a unicorn daily driver too.

And then save up as much of that healthy descretionary income as you can. Interest rates are high right now so you don't even need to get a brokerage, just an Ally or Discover savings or whatever. When that Kia lease is up, you'll have a nest egg and be able to get something cool.

 

[Stevo12]

Your credit score and credit history is literally the most important asset you have when you are young. THe ability to demonstrate that you can take on reasonable debt, manage it and pay it off is how you build credit to buy said house.

Without that history, and only having small bills and rent, it's a harder story to tell despite the fact that your credit score is in the 700s.

When you take that and add to the need you have described, and knowing that an ishtbox is just as much of a risk as it is a convenience, I suggest buying a used but still nice reasonable used car, and paying it off over time.

This, all of this.

My wife's credit score has always lagged behind mine, because I have more credit history than she does. Got a card when I was in college, and as said above - treated it as cash, paid it off every month. If I did not have the money to cover a purchase, I did not buy it.

Given your stated usage, find a <10 y/o Subaru Forester 6-speed. They're harder to find but they're out there. Make sure you spend the money to get a decent one - no BHPH specials, don't cheap out. You do not want your car to f**k with your ability to get to work - I know you mentioned the bulk of your commuting will be done by bike/walk/bus, but if you need to be on-site (you mentioned construction) make sure you have something that will get you there any time.

Interest rates are what they are, can't go back in time and snag something for 0%. But it also doesn't hurt to do due diligence and look at alternatives in your monthly payment range - i.e. if there's a cheap lease deal for you to help build up your credit while getting situated at your new job/apartment living situation, that might not be a bad idea either. If the monthly delta between a used 6MT Forester and a new 6MT Crosstrek (don't know what it would be off the top of my head) that might be something to at least look at. Bottom line - run the numbers and see what you're comfortable with.

I get the lure of sh*tboxes - when I got my first house, I used it as an excuse to get the $1000 XJ Cherokee I'd always wanted. But I didn't use it as my only means of transport so I always had a way to get to work. The risk is not usually worth it, unless you're in a job/career that you really don't care for.

 

[puma1552]

Wasn't there an Altima lease going on for like $190 a month with nothing down?