I need Atlas' help! Any financial majors, or anyone, to buy or lease a car?

[#TheShadowyAbyss]

Hello everyone, basically I am looking for a new car since mine is on its last legs, my yearly income with my raise is about $12,000 yeah...I know but I only pay my phone bill as of now. I currently have $1,500 to put down on a car that is worth about $9,000 (it's a 2015 Nissan Versa S Plus) and will pay about $167 a month on full-coverage insurance or almost $1,000 every six months (I will go with the monthly plan since it's easier than shelling out $1,000 every six months)

It doesn't matter to me whether or not I actually own the car or essentially borrow the car for 3 years what ever it is. I am aware of mileage limits of around 10,00-15,000 a year (but I only use about 56 miles a week so I'd be way under that)

I am also fully aware I am responsible for it whether it is mine or borrowed.

For those experience, what should I do?

[RINO Tom]

Honestly, I would never BUY a car.  Lease it.

[Green Line]

Why is your 2015 car on it's last legs?  What did you do to it??

[#TheShadowyAbyss]

Why is your 2015 car on it's last legs?  What did you do to it??

No, that's the car I want, I drive a 2002 Mercury Grand Marquis.

[Ban my account ffs!]

Honestly, I would never BUY a car.  Lease it.

Wow.  Talk about tone deaf.

I guess he did talk about "borrowing the car for three years" which is not something I've heard about.

[Green Line]

Why is your 2015 car on it's last legs?  What did you do to it??

No, that's the car I want, I drive a 2002 Mercury Grand Marquis.

Ohh ok read too fast my bad.

BUY!  Edit:  I would need to know more about your financial situation.  But I say buy.  You live in Florida.

[Ban my account ffs!]

How much are the car payments?  

Judging by 9000-1500 down payment...7500 over three years/2500 per year or 200-250/month...plus 2000 a year for insurance...that's $4500 per year out of $12,000 before gas or maintenance.

Unless you have a significant raise ahead of you this would be a bad choice.  Hit up your parents or find a cheaper car.

[RINO Tom]

Honestly, I would never BUY a car.  Lease it.

Wow.  Talk about tone deaf.

I guess he did talk about "borrowing the car for three years" which is not something I've heard about.

LOL, watching an Illini game, but what?  Those were the poll options.

[#TheShadowyAbyss]

How much are the car payments? 

To own is about $226 with an interest rate of 5.4% and a period of 36 months.

Lease for 36 months is $113

[Ban my account ffs!]

Honestly, I would never BUY a car.  Lease it.

Wow.  Talk about tone deaf.

I guess he did talk about "borrowing the car for three years" which is not something I've heard about.

LOL, watching an Illini game, but what?  Those were the poll options.

Yeah i didnt see the poll options.

I just thought you were suggesting he lease a new car.  I've never heard of leasing a used car.  But suggesting a new car lease on $12,000 a year income is folly.  And probably not possible.

[Ban my account ffs!]

How much are the car payments? 

To own is about $226 with an interest rate of 5.4% and a period of 36 months.

Lease for 36 months is $113

In this case I'd lease for sure then.  But prepare to keep it in tippy top shape.  Oil changes every three months, tires in good condition, no spills/stains.  Allow for extra maintenance in the budget. 

[Murica!]

Buy, leasing is not a smart move.

http://thegarage.jalopnik.com/here-are-four-reasons-why-leasing-a-car-is-a-horrible-1679935623

(Personally I would say buy something cool used rather than waste money on a new car, but I'm a car guy so whatever)

[Ban my account ffs!]

I mean... I'd strongly strongly recommend finding a cheaper car.. more in the $5000-6000 range.

Even with the lease you're looking to spend like 28% of your income on just the car and insurance.  This was fine for me, for example, when I was in high school and living at home and knew I would be the entire time I was paying the car off.

But you're older and who knows what you'll be doing in 3 years.  It's prudent to borrow $3500 rather than $7500.

[Mr. Smith]

If you drive conservatively enough, lease it...ownership just plain old sucks.

[Meclazine for Israel]

Depends.

If you own a business, leasing the car may be more tax effective.

If you have no business deductions, then buying may be more appropriate.

[DC Al Fine]

I'm with Snowguy on this one. You'd be spending way too much of your income on a car either way. You graduate and have difficulty finding work in your field and go from living at home on $12k to living on your own on $20k.

Best bet is to keep saving and drive your Mercury until it dies, or your financial situation is more secure. Most car companies offer a decent new grad program. If the car dies before you graduate/can get a job in your field then:

Buying a used vehicle entails some risk, but it is almost always the smartest decision. Stick with something reliable and economical, like a Civic or a Fit. If you can't find anything in your city, check out neighboring metros - sometimes there are large differences in the market for used vehicles. You don't live in snow and salt country, so rust on the undercarriage (the bane of used car purchasers in my part of the country) will not be a problem.

[Torie]

How much are the car payments? 

To own is about $226 with an interest rate of 5.4% and a period of 36 months.

Lease for 36 months is $113

To complete the analysis, you need to know the residual value of the car, that you would give up after 3 years with a lease (with a loan, you would own the car debt free after 3 years). Also leases basically entail a huge prepayment penalty if you get rid of the car early. First you pay off interest under a lease, and then principal, as opposed to a loan, where the payments include principal and interest. That really sucks.

And the 5%+ plus interest, is about 5% higher than the interest you would earn from a bank, so that is in my mind another cost. To take an extreme case where borrowing is an investment rather than a consumption expenditure, if you can borrow money at 4%, and invest it in something safe at 6%, I view that as well, an investment, rather than a consumption expenditure. I play that game with long term fixed interest mortgages. If interest rates ratchet up, the 4% interest rate on the mortgages would look pretty good, if high quality short term bonds were earning 6%.

Anyway, if it were me, in your situation, I would buy a clunker, that just gets you from point A to B. Heck that is what I owned for years, even with well, a young lawyer's income. I plowed my savings into real estate instead (taking big write offs against my income for tax purposes under the provisions of the tax code back then - Reagan loved real estate investors, until finally, the drain on the treasury, forced it all to go away in 1986).

But I am not a miser. I just bought an RDX. I can now take the curves on the roads through the Catskills going the speed limit. I was afraid to do that with the Kia Sorrento (which has now been consigned just for tooling around Hudson and its "suburb" of Greenport).

[dead0man]

You can lease a used car?  New to me.


I'll add my voice to the chorus of "find a cheaper car".  I can never stress how financially genius the $500 car is (ok, in 2017, it's more like the $800 car, but still).  Go to your local Craig's List used cars section.  Look for any Honda, Subaru, Mazda or Toyota that is running and for sale for less than a grand.  Buy it.  Liability insurance.  Drive it until it dies of something expensive, sell it to the junk yard for a few hundred bucks and get back on Craig's List.  Even better if you can do some shade tree mechanic type stuff, but even with no knowledge of cars it's still an amazingly cheap way to keep a car.

[Waterfall]

If you make $12K a year you have no business even thinking about cars newer than 5, maybe 10 years old.

Go on Craigslist and look at the cheapest Toyotas and Hondas you can find. No SUVs, only sedans, compacts, and hatchbacks. Test drive them, then take the one you feel best about to a mechanic you trust.

If you win the lottery tomorrow you still should not lease a car or buy a brand new one, it's just a way for car companies to rip off people who don't know how to manage their money. ALWAYS buy used cars. The only exception would be if your livelihood actually depends on your image, including the car you drive. And even then you're probably wasting your money.

[jamestroll]

You can lease a used car?  New to me.


I'll add my voice to the chorus of "find a cheaper car".  I can never stress how financially genius the $500 car is (ok, in 2017, it's more like the $800 car, but still).  Go to your local Craig's List used cars section.  Look for any Honda, Subaru, Mazda or Toyota that is running and for sale for less than a grand.  Buy it.  Liability insurance.  Drive it until it dies of something expensive, sell it to the junk yard for a few hundred bucks and get back on Craig's List.  Even better if you can do some shade tree mechanic type stuff, but even with no knowledge of cars it's still an amazingly cheap way to keep a car.

I thought of that in the past, but I do too many long distance drives. Long road trips tend to be easier on the car but on those $800.00 cars you never know when they will go out. Going out in the middle of Nebraska would be a night mare.

Also a lot of those cars may not pass safety or emissions inspections.

[Waterfall]

I thought of that in the past, but I do too many long distance drives. Long road trips tend to be easier on the car but on those $800.00 cars you never know when they will go out. Going out in the middle of Nebraska would be a night mare.

Also a lot of those cars may not pass safety or emissions inspections.

My second car was 21 years old when I bought it for $750 with 150K miles on it. I drove it to 211K miles and then sold it for $600. I was able to do this because it was a Toyota.

[dead0man]

Aye, those are very legit concerns.  I'm glad NE doesn't do inspections, emissions or otherwise.  There is no way The Beast would pass anything.

[Mr. Smith]

Smogging/Inspections and that type of stuff are precisely why a car 10 years or younger with 150K or less should be a rule of thumb to go by.

Otherwise you risk being stuck wondering why the hell you have a CEL whining about a Catalytic Converter, and subsequently taking out some dough to replace it.

I'm not even going into all those other parts that eventually cave [such as belts, pumps, filters, alternators, etc.] and have to be replaced after 1 hundred-X-K miles.

Anything less than $1.5K is likely to have something YUGE that'll make you pay twice or thrice the upfront.