Buying a car

Facebook original9
Jul 7 40 Comments

I'm a new grad. After tax, I should have about 44k from my signing bonus. I'm considering buying a Honda Civic Sport Hatchback (or the Touring version though idk if the extra features are worth an extra 5k~) which would be about 23k-28k. I could live with just public transportation most likely in Seattle, but I really do enjoy driving which is the main reason why I'm considering this.

Would using my signing bonus on this be wasteful? And if I do decide to get it, should I just buy it straight up ? Or put a down payment on it and get a loan. (If the latter, how much of a down payment to put down on it?)

Thanks for any advice!

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TOP 40 Comments
  • Microsoft
    Hodor

    Microsoft

    PRE
    Expedia Group
    Hodormore
    If you enjoy driving, why would you consider buying a civic?
    Jul 7 10
    • Facebook original9
      OP
      I like the looks of it, and it also seems fairly cheap. And I like driving in general, not that picky about what car I drive
      Jul 7
    • Microsoft
      Hodor

      Microsoft

      PRE
      Expedia Group
      Hodormore
      Then you don’t enjoy driving. You just enjoy being inside a car that you think looks good
      Jul 7
    • Facebook original9
      OP
      Who are you to define what I enjoy or not? I enjoy being in control and operation of a motor vehicle which is the literal definition of driving. What's up with the gatekeeping. That's like me saying that amateur sports players can't be athletes because they never played in D1 or pro sports
      Jul 7
    • Microsoft
      Hodor

      Microsoft

      PRE
      Expedia Group
      Hodormore
      Have fun ‘driving’ the civic, kid. 🤣
      Jul 7
    • Google DocStrange
      Hodor stop with the gate keeping. Dude enjoys driving. You don’t have to be into high performance cars to enjoy driving. I love driving my sports car, but the rental Tacoma I had last week was fun to drive too even though it doesn’t have great handling or acceleration.
      Jul 7
    • Red Hat / Consultant QhoD50
      Agreed. At least get a Civic Si
      Jul 7
    • Amazon thatright
      Hodor is an idiot.
      OP, Honda civic is nice. Go for it.
      Jul 7
    • ForRent / Eng HpDp30
      Well, the redesigned Civic is pretty fun to drive with decent performance and amazing handling. Puts a smile on my face every time I drive my friend's Civic.
      Jul 8
    • Move
      aaahehhfn

      Move

      BIO
      H
      aaahehhfnmore
      If you gonna get a civic get a 2016 si and then rice the hell out of it.
      Jul 8
    • New VgQe44
      Spending $44k on a car is an unnecessary expense. Look into a certified pre-owned instead of a brand new car. It’ll be cheaper and you’ll still get similar warranty to the new one.

      What I would do is see if you know any friends that own a car lot. Ask if you can buy a car from the auctions they buy cars at, and in exchange you would kick back $$$ for allowing that. You’ll end up getting a newer car for even less.
      5d
  • Nvidia fckm
    Don't buy. Lease a nice Audi or BMW or something, then enjoy every time you drive it.
    Been there, done that, it's awesome. I'll never go back to buying a depreciating asset that breaks down often, even when brand new
    You're welcome
    Jul 7 0
  • Amazon oktrdq
    Put a small down payment and get a loan. Interest rates are low. Put the rest of the money in index funds.
    Jul 7 2
    • Facebook original9
      OP
      What would you consider to be a small down payment? And also how long of a loan period? I was thinking of investing money left over into something like wealthsimple, haven't really looked at index funds or would they be about the same?
      Jul 7
    • Tinder paradigm1
      $0 down, loan period depends on interest rate
      Jul 7
  • Google DocStrange
    As others have said, buying used will save you a lot of money over time. As to whether it’s a good use of your funds, that depends on your overall net worth, credit, and future plans.

    All that said, don’t overthink it. You are going to have a long career most likely. 20k or whatever now is a trivial amount of money in the long run.
    Jul 7 0
  • Microsoft TAIp46
    Don’t buy new. Buy 2-3yo off lease and let the dealership eat the depreciation
    Jul 7 1
    • Microsoft
      Hodor

      Microsoft

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      Expedia Group
      Hodormore
      What are you talking about? A car depreciates the most in its first 3 years. How is the dealer eating up anything?
      Jul 7
  • Microsoft kebabs
    Buying a new car, especially at your age, is a waste of money because of the massive depreciation. If you’re gonna keep the car for 10 years then maybe it works out. Otherwise please buy a used car, even 1-2 years old is still “new”
    Jul 7 0
  • New / Strategy
    gandalfhan

    New Strategy

    PRE
    Oracle
    gandalfhanmore
    Buy it ! Life is short ....u dont want any regrets later, Honda is a good choice and right in the resale market....
    Jul 7 0
  • Thomson Reuters / Eng
    penguin0_0

    Thomson Reuters Eng

    PRE
    Amazon
    penguin0_0more
    It is not wise, just lease for two to three year, and get a new car when the lease is over.

    Better to put money in index fund than wealthsimple, it shows u dont know much about how regular index fund investments works. You will want to read up some finincial book on index fund and investment, else your are just throwing money away.

    As a new grad, u would want to save up as much as you can. A car might not even be necessary if just for occasional drive, zipline or rental will be a better option for you.

    U will be lossing alot of money for management fee through wealthsimple and have no control over your investment.

    A little adds up, and will cost hundreds of thousands over the years.

    A lease and a small loan is better for you if u decide to buy it, because it will help with your credit score instead of buying it with full payment at once
    Jul 7 0
  • Facebook original9
    OP
    If I buy used , should I finance it or just get it outright? I see some used ones that are about 15-17k
    Jul 7 6
    • Google DocStrange
      Depends on the interest rate you can get.
      Jul 7
    • Facebook original9
      OP
      What would be considered a good interest rate? I'm not sure if I'd be able to get one since I don't have a long credit history here
      Jul 7
    • Google DocStrange
      Ah, that’s another thing. Many car manufacturers have new grad programs. I’d check those out. Personally, anything below 7% or so I’d probably finance. Anything higher I’d just pay.

      ...however, one caveat. You want to build a credit history and one way to do that is to have a long term installment loan like a car loan. If you have thin credit it might be worth financing this one and paying it consistently just so future purchases are easier.
      Jul 7
    • Facebook original9
      OP
      Hm I'll definitely look into the new grad stuff, hopefully they offer it to non-US school grads.

      About the building credit part, does having a car loan help build it a lot faster than say credit cards? Right now I just have one credit card that's been open for 10 months so far so yeah I'd say it's thin. I was thinking of applying for more cards too , to help build credit
      Jul 7
    • Google DocStrange
      Having a car loan does help build it faster. On larger loans like for a car or a house they like to see that you can pay off a relatively large sum of money over time.

      It’s something I experienced when I got my first car. Even though I had credit cards and a good credit score they still wanted to give me a bad rate because I didn’t have a history of installment loans.
      Jul 7
    • Facebook original9
      OP
      Is there a term length that I should be going for? I see they range from anywhere from 12 to 84 months....and does that factor into how much credit gets built?
      Jul 7
  • Asurion wooooow
    Why would you get a loan if you have the cash?
    Jul 7 5
    • Google emc2too
      Emergency cash probably
      Jul 7
    • Asurion wooooow
      Then get a cheaper car?
      Jul 7
    • Google emc2too
      Yes thats what i do
      Jul 7
    • Facebook original9
      OP
      Build credit and also I thought that maybe I could use it more effectively by investing the cash, which could end up making more than the interest I'd pay with a loan.
      Jul 8
    • Asurion wooooow
      Potentially, but with a risk, so you may have a liability with your loan and adding risk with your "investment"
      Jul 8
  • New / Ops
    BNko85

    New Ops

    BIO
    AMA about science or my field
    BNko85more
    Buy a used hatchback with as much space that you can get while staying in the performance range you're interested in
    7h 0
  • If you don't mind getting something a little bigger, dealers are moving Accord EX's for cheap. One of my friends picked an auto EX 1.5T for ~25k out the door (car+taxes, title, registration). If you like driving you could prob get a manual Sport 1.5T for cheaper than a Civic.
    Jul 8 0
  • Facebook H4528si
    Lease is almost always better(assuming new car), check LeaseHacker.com

    I would try golf gti which would be funner and faster, 2018 and newer have 6 years warranty so you can buy a used one and still have warranty for 4 years!
    Jul 7 0
  • Google emc2too
    Get a used car from craigslist thank me later when you upgrade during economic depression pennies on the dollar if you still have a job then.
    Jul 7 0
  • Facebook / Eng VdPQ14
    I'd suggest getting a car by a loan, either new car or pre-own. your sign-on bonus is valuable, you can put that in a saving account(2.1% APR) against the interest or invest elsewhere. And one day if you want to buy a house, you know, you still have cash.
    Jul 7 0
  • Facebook public2
    Sounds great just make sure you aren't buying a new one.
    Jul 7 0