On Buying a Used Car at the Age of 21

As most personal finance blogs recommend across the board, buying used is the way to go.

My very first car was a 2008 Hyundai Sonata that my parents bought me when I was 17. I don’t remember how many miles it had on it, but I do remember I almost crashed it on my very first drive home from the dealership -entrance ramps are short in New York for those of you who don’t know-. Regardless, despite my questionable driving skills that car lasted me 4 years, and I in it. I loved that car.

Enter 4 years later. I got my first full-time job. It came with a salary! Hours! Business cards! I was a real live person you guys!

I guiltily admit that during down time at work I started perusing, just window shopping, new car websites. I would a configure a Jeep like this, another one like that. What would it cost me to lease, what would it cost me to buy?

A $40,000 car *cough expensive taste* stretched out into lease payments over 36 or 48 months with 10% down, I reasoned, would only cost me $400 to $500 a month. That could be done, right?

Look at how pretty it is. And safe? I’m all about those safety features. Plus, that 4 wheel drive will come in handy during the winter. In fact, it will help me get to work! That is me being ~~~responsible~~~, I said in my head as I configured like a mad woman, holding onto my mouse and my dreams and ignoring the angel on my shoulder saying this is a bad, bad idea.

Like I said before, I am an expert at justifying spending money to myself.

However, as time went by, I crawled out of the maze of insanity and decided that I would not buy a New Car.  The prior winter was incredibly difficult with my 2 wheel drive Hyundai Sonata. Getting to work was a slippery and slidey mess. One day, I couldn’t get the car out of the driveway (yay snow!), but I used my mom’s 4 wheel drive Infinity to get to work that day. So while I decided that it would not be a smart money move to buy a new car, I still had my eyes and ears open for the possibility of buying a car.

The precepts I decided I wanted were:

1. A Jeep

I have wanted a Jeep since I got my driver’s license. I know that brand loyalty can ultimately cause unnecessary expenses, but I had my heart set on a Jeep. The downsides of Jeeps are poor gas mileage. But a 4 wheel drive car with low maintenance costs could work with my needs.

2. 4 Wheel Drive

New York winters and a job that is 16 miles from my place of residence made getting to work in a 2 wheel drive car a bit dangerous. 

I could picture myself with any color, most configurations, and any year Jeep.

On one faithful day, I was looking at a used car website at Jeeps. And like out of god’s dream made for me I saw a 10 year old Jeep Grand Cherokee with 36,000 miles on it. It was located at a dealership only 1 mile away from me. Sticker price: $15,000. I was on the phone that instant, they put the car on hold for me, and I was at the dealership the next day.

The breakdown of my purchase came to this:

$3000 down payment (thanks to having money set aside, I was able to cut a check)

$4000 trade-in value of my 2008 Hyundai Sonata

$8000 car loan @ 5.75% interest rate 48 months

My monthly payment is $187, and over the term of the loan I will pay approximately $1000 in interest. Should I have waited until I had enough cash in the bank to buy a car outright?

Car insurance costs me an additional $125 a month, so my car payment for the time being is over $300 a month.

It is good to acknowledge and be aware of the true cost of taking out a loan. Was it stupid of me to get into debt for something classified as a want?

Live and learn.

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