Car Interferring With Investing
I'm a college student without a car. I had $5000 to do whatever I wanted and everyone said I should buy a car and that I'll have the rest of my life (I'm only 22) to start investing. Sooooo, I invested the $5,000 in a rehab project (home conversion into 2 condos) with the money. I'm looking at a return of 10k and I'd like to reinvest my money in RE and not have to spend my money on a car.
I'm thinking of taking out a school loan and buying a car with that so I won't touch any of my investing money. I definitely won't be buying new but I want something reliable so nothing older than a 96'.
Seeing as how I do NEED a car, whether I should buy one isn't the question but moreso how much would you spend on a car? Does the school loan sound like a good idea? Should I re-invest to build up more money before I buy a car? (I live in the city and can get by pretty good with the help of public transportation and my mom's car when she's not using it)
Thanks,
Jennifer
Consider going to an auction for your car anything 1996-98 mid size and smaller you should be able to pick up for around $1500. I have bought two in the last several months for my kids.
Good Luck
Bob
Dear Jennifer,
I agree with Bob. Try the auction. That's the latest craze in my neck of the woods. One friend got an Infinity, my sister-in-law bought a BMW, my brother just bought a Lexus and another friend is looking. (You don't have to go for the luxury cars. They have all kinds). I'm the odd one because I bought a Pontiac van from a dealer a few years ago. They think I'm out of my mind. The buys are out there, but you have to be careful. They go fast and you can't sneeze.
Cordially,
Alice
Personally, I'd look for an old Honda or Toyota.
I'm in the same boat as you, (21 year old college student, little cash) and thats what I did. I picked up an '86 Accord w/190k miles for $600. I've driven Hondas and Toyotas and they've been nothing but reliable for me. Furthermore, buyers for cars this old and/or with high mileage are fewer and far between, so you should be able to negotiate a nice prices with the seller.
-Tim
I would say pull out a school loan, due to the low interest rate of students loans. I heard some students use school loans for investing knowing they can consolidate their loans later on at round 2.8%. So its up to you.
Consumer Reports doe a great job at rating cars. I'd recommend a car at least 2-3 years old, as that is the biggest hit in depreciation. Consumer Reports has reports to summarize which used cars are recommended in certina price range, which used cars hold their value, and even problems/maintenance on each model for the last several years.
Kelly Blue Book is now online for you to easily assess what you should reasonably expect to pay for a vehicle.
We have had good luck with CarMax, and AutoTrader (certified from dealer). Mixed reviews on purchases from Ebay.
Get a bike!!!! no not a motorcycle a bicycle! Its great exercise and costs very little after the inital purchase price. I havent been to DC in a long time and maybe cycling isnt safe or convenient there, but where I am its great. I come home relaxed instead of pissed off from fighting traffic. By the way I do have a car available to me that my fiance drives. So to anyone that would say you NEED a car I would mostly agree.
Good Luck
Jennifer,
It is obvious that you can get reliable transportation for a small price, but I want to mention how impressed I am with you.
When your peers were telling you to buy a car, you invested your money. That is incredibly impressive, especially at your age. I wish I had my head screwed on as straight as you do when I was your age. Ten percent of the population holds ninety percent of the wealth in this country. While you may not be able to retire yet, your mind set is that of a ten percenter. Congratulations! I know you will make the right decision. I am very impressed.
Hi Jen, As a car dealer, I will tell you that sticking with a Honda or Toyota is probably the safest, best-bang-for-your-buck vehicle. Be careful of the public auctions, I have seen a lot of shenanigans go on, to the point we will not even buy one from a public auction anymore. NADA is what you should be going by, not Kelley Blue Book or anything else (the bank uses NADA, so should you). Do not worry too much about mileage on a Honda or Toyota (definitely worry about it with a domestic car.) For around $1000, it may not be pretty, but it will be mechanically sound and get you from point A to point B. Good Luck!
It could also be possible (and yet another profit-making endeavor) to buy and resell the cars you're driving for a profit, say if you could buy them at an auction, from motivated sellers out of the paper, ect.
Even where state laws resemble the USSR, they usually still "allow" you to buy/sell 3 or 4 per year before you're technically considered a "dealer."