To Auto Loan or to not...

[monkeywre]

I'm going make an alternate suggestion.

Keep your used car until you pay off your student loans or purchase a used car with cash to the tune of about 10k.

Congrats on making a profit on your condo, and after all those years of school I know it would feel great to buy a shiny new to you BMW. However you need to keep in mind this purchase is purely a luxury item, and buying the nice car will get old as soon as the huge payments start coming. Another poster suggested purchasing a nice 10k used car with cash, and paying off your student loans with the rest. This is a fantastic idea, coming from a beater a 10k car will be amazing and you won't have any payments on a car that you would have otherwise been underwater in. I know that student loans are percieved as good debt, but I would disagree on this point. They are good to the effect that they will allow you to go to school and get an education you might not otherwise have had access to, but they are still debt that you must pay back, and keeping them around forever just makes Sallie Mae rich. To the poster that said student loans are 3-4% intrest I would like to know where you got your student loans from, 5.5-10% is more realistic. I would have to suggest paying off your loans first, the BMW dealership will still be there in 2 years when everthing is paid off, and if you buy your bimmer in cash you will enjoy it that much more because you can just enjoy it without worrying about how much you're paying for it. Please whatever you do, just keep your car purchase in perspective, reliable transportation is a must, but a 30-50k car is not, and it's excessive as well as damaging to your financial health if you can't afford to pay for it.

[tv4184]

Well I went from a 2004 Honda S2000 to a 1993 Maxima and then added on a 1999 4runner which is my reliable car.  I also have a 1993 Accord which is replacing my Maxima so I think that I am pretty good as for transportation.  I just wanted to pick up the RS4 as it is a rare comodity to come across (only 1900 imported to the U.S. with only 25 in the color I was looking for).  I came from a 2007 TSX before the 2004 S2000, which went to my parents since I didn't want to hold on to it.  And after that I am pretty set on getting either something I'd want to hold on to for 10+ years or just waiting.  Thanks for the recommendation on a 10k used car and I am all for used cars since someone else has taken the depreciation hit for you.  That's why I am looking at the used RS4 or used M3.  However obviously I am on this board to make sure I am making the right financial decision at this time.

As for the student loans I didn't intend on holding on to them for more than 2 years at most.  In all reality I make enough to even pay it all off within this year if I wanted to but that leaves me with eating ramen noodles on a daily basis with no spending money on the side.  Maybe I should pursue that route and pay it off in six months after applying whatever I get from the condo sale.  I may consider saving some of it for a rainy day fund but I do have pretty good job security being in the medical field so I don't have to worry about looking for a job at least for 9 - 21 more months.  Look forward to more financial advice though.  I haven't been out long enough to know as much as you guys do.

I'm still puzzled at where my fico score is right now though...

[Anonymous]

---

@Creditaddict wrote:

you should check into Alliant... I believe they were offering a Student loan for like 3 or 4% fixed... possible consolidation of what you don't pay off!

---

CA, this was a great suggestion. I should have like 30K in SL when I am done at 6.8% as well and I thought let me do this - I called up Alliant and inquired about their private SL's - they are actually variable at Prime + 0.5% - I dont know about variable. I also asked if I could consolidate my current SL's with them and they said no . Its only for new school year. Do you know of any other lender that would do private SL's fixed at a low rate and disburse to me so I could pay the other ones off?

[tv4184]

Yeah I wish I could refinance my loans for that much.  I'm stuck at 6.8% until I'm done paying them off next year.