Should I get a vehicle before student loans are paid off?

[Anonymous]

Hi, I never thought the day would come, but in about 11 months my student loans will finally be paid off. Originally I was planning on getting a new (to me) vehicle in about 18 months but am now wondering if I should get one sooner. The reason being is my student loans are a little over 10 years old and when they’re paid off my only other credit mix will be the three credit cards I’ve opened in the last year, all with 1-2% utilization and will stay that way, and two bank loans for my last two vehicles that’s been paid three years ago (both had a co-signer so I could get a lower rate). I assume once they are paid my credit score is going to take a fairly big drop. If I wait like I would prefer to do, will I end up paying a higher interest rate because my AAoA will drop down to less than two years or is it better to apply for a loan while these are still reporting? Thanks

[Anonymous]

Are you on any credit borderline ? You do not show your scores so it is hard to give you an answer. If I was at least 740 I would pay off the loans , If I was 720 or less then I would not touch anything and get the loan. I would also not sign anything giving them premission to run credit. If you are borderline than get your own financing via credit union with one pull.

I ended up with 4 pulls for one car using the dealers and contrary to popular belief they dont " all count as one" Chase reports it different than Subaru so they both count. I am still wondering why Subaru runs credit as they don't offer loans they use Chase. It seems like only one pull shoudl be needed. The pulls cost me around 4 points.

[Anonymous]

Thanks for the information! My score from Discover says 787, I’m just wondering how much it could drop once they are paid off and end up costing me more in interest possibly. I wanted to know what being debt free felt like for a few months haha, but if getting a vehicle sooner saves me money than I guess I can wait. If it matters, I am pretty set on an awd Honda CR-V that is 2015 or newer, or possibly a Subaru Forrester that’s also 2015 or newer.

[Anonymous]

If your car loan’s interest rate is low, you could get a better net return if you invest your money. If your car loan has a high interest rate, refinancing is another way to reduce your financial burden. Depending on how your credit has improved since you originally took out the loan, you could qualify for a significantly better auto loan rate. I got my car right after my student loans paid off. At that time I do not have much money so I purchased a used car from a Japanese car trading platform (https://carfromjapan.com/cheap-used-toyota-prius-for-sale-year2011). My Toyota Prius 2011 is quite good and affordable. You can consider a used car to save money.

[wa3more]

Used car bought all cash if possible.