At the beginning of my third year of college I made the leap and bought Buelah! It was love at first sight. Five years later, she’s still my ride or die. #myfirstbae
It was such a convenience to be able to grocery shop without the having to struggle with my bike. But also, it gave me the freedom to be able to go visit my family one city over more often. I didn’t have to bike in the rain anymore, and I could go on more adventures with my friends. I was LOVING this freedom! But then once I realized what kind of financial pickle I had gotten myself in, it was…concerning. Though I had saved about $1,000 for a down payment, I didn’t use it and I still don’t even know how that happened! Makes no sense, I’m aware. Then my interest rate was rather steep, it was about 17%. Plus I didn’t even think about how much fuel would cost, insurance, maintenance…I had gotten myself into a bit of a pickle, oops.
To put things in perspective, I was making about $10/hour at my part-time job during that time. I supported myself throughout college so my rent, food, school and fun was all on me. I noticed that those hefty payments (most of which were interest) were started to put a dent in my pocketbook so I just decided to work more. Which was okay for a while, until I really started struggling with keeping my life together. My mom noticed and we talked about it. Bless her heart, she offered to help me refinance my auto loan! Now, it’s generally not recommended to co-sign for people. But, that’s a conversation for another day. Anyway, the interest rate went down to 3% and the payments decreased by more than half . I would only be paying $110 per month instead of over $250. That flexibility really helped give me the space I needed to restructure my budget and get back on track. I was able to pay Buelah off a year early and I’m so glad! Payments can be annoying after awhile. Shout out to Mom for saving the day =)
Here’s a list of things to think about if you’re considering making your first car purchase:
- Savings: You want to have as much liquid cash available for your purchase. It gives you more negotiating power and if you do need to finance some of it, it can make those terms more agreeable. If you haven’t built a strong credit history, this is a good weapon to have.
- Payments: If you’ve decided to finance your car, how do those payments work out with your current budget? Will you be scraping by to make this purchase happen?
- Maintenance: Consider how much it can cost you to maintain this vehicle-oil changes, miscellaneous repairs, part replacements. Would you have to take it to a speciality shop to get serviced? Are replacement parts easy to find, reasonably priced, and readily available? Can you find it on Amazon?
- Fuel: If you’ll be commuting frequently, consider your fuel efficiency. For example, Buelah has a large tank (25-gallons) and pretty decent fuel efficiency, I get about 500 miles to the tank.
- Insurance: This can vary greatly, but it is an essential. No point in having a nice car that you can’t afford to insure, and therefore can’t drive.
- Tires: Smaller car tires are less expensive than tires for larger vehicles. This isn’t to say that you shouldn’t get a large vehicle if you want one! Just keep in mind that you’ll need to set aside money for that when the time comes; driving around with bald tires and a prayer is not a good idea in any climate.
- Parking: If you live in an apartment complex or similar housing arrangement, will you need to pay extra for a parking space or garage? If so, add that to your list as well.
- Toll Bridges: If you’ll be passing through toll bridges often, be sure to always have cash with you or purchase a pass so you can go where you need to go.
- Registration: You have to pay the DMV each year for those shiny little stickers for your license plate.
- Emergency: There will be times when your car will throw a fit with you and decide to break something expensive. Buelah decided she was angry with me last fall and made me drop a hefty dollar to get her starter replaced. Try to set aside at least $500 for those drastic repairs that need to be handled, so that you’re not left car-less for too long.
- Roadside items: You want to make sure you have items with in the case that you have trouble on the road: a jack, jumper cables, flares/triangles, etc. They can prove to be very useful during those trying circumstances.
These are the things I have experienced during my time with Buelah and hope they get yours gears turning for things to consider when you make your first or next vehicle purchase.
What has been your biggest surprise expense with your car? If you haven’t made your first car purchase yet, what are you looking forward to the most? Comment or Tweet me to let me know!