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chelle21689's avatar

Is it a bad idea to make two big purchases (monthly payments) at once?

Asked by chelle21689 (7421points) April 9th, 2016 from iPhone

I am on the apartment hunt with my boyfriend and have been trying to do some calculations. I could have about $1,000 saved each month after sharing costs with him on rent, bills, groceries, etc. This also includes my entertainment budget, gas, etc.

So my thing is I want to get my own place but I also want to buy a car. I had the same car for 11 years and it’s 21 years old. It runs but is pretty junky. If I get a car I will probably save about $700 a month after bills on apartment. I guess I should take in consideration furniture but I have money saved about 40k for emergencies but it can go by quickly once I spend on appliances and furniture.

People caution me on getting a car and getting a place in a short period of time. Especially since I’ve never had “big bills” to pay for other than just my gym membership and credit card bills.

What do you think? Also, any tips on what to ask when looking at apartments? Thank you.

P.S. You’ll see another job update soon from me lol for those that follow.

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11 Answers

janbb's avatar

Since the car is still running, why not do the apartment getting and settling in first and then see how you make out before buying a new car?

CWOTUS's avatar

In some of the questions you have asked here, it seems to me that you are pretty smart about planning and handling money. So good for you on that account.

That being the case, I would recommend to you that you reconsider your “junky, old” car. If it runs reliably (that’s important, especially if you’re using it to get to work every day) and the maintenance costs aren’t higher than a car payment would be, just keep your head down, keep that car running as well as it will for as long as it will … and make bank.

The more you delay these kinds of purchases at this point in your life, the more likely you will be to be able to make far greater choices in the future.

Aside from my routine dad-speak, though …

When you get a new car, or even a newer-used car, your insurance costs will probably also rise. Depending on how car registrations and personal property tax works in your state, those will also increase due to the higher value of the replacement car. So that has to figure in your budget, too. (In addition, I would expect that you’ll want to actually use the new car a lot more, and that’s going to increase your monthly operating cost.)

Finally, depending on where the new apartment is, you may not need the car for commuting any more if you’re on a public transit line of some kind. So you may be able to comfortably delay the replacement car purchase indefinitely.

Aside from that, the only other consideration I can think of is that the new expenditures will have a certain effect on your credit rating. It won’t be a huge one, and it won’t be permanent – as long as you make your payments, but there will be a negative hit there for a time.

Make and save your money while you can, though.

chelle21689's avatar

@janbb still running because I keep having to repair it, luckily my boyfriend is a mechanic! Lol it takes a lot of his time. My hub cap just fell off the other day and it’s embarrassing. Also my car lock takes forever to open.

ARE_you_kidding_me's avatar

People always say drive it till it dies. I say drive it and sell it just before it dies Knowing where that break point is can be hard though. Once they stop losing value and bottom out you can probably be safe and dump it once you find yourself doing repairs on it. 40K is quite a bit of emergency cash especially when you don’t own a house but that may be different where you live or if you have a medical condition. May consider investing some of that and get it working for you.

chyna's avatar

At some point the car’s repairs are going to cost as much as a car payment even with your boyfriend doing the repairs. Parts can be expensive and possibly hard to find on a 20 year old car.
But if you are planning on getting an apartment within the next couple of months, then I would wait for a couple of months after you get your apartment and see what your bills will cost you. Then figure out how much of a car payment you can afford. If you think this apartment hunting might go as long as six months or more, then go ahead and get a car now.

Also, I think you need to ask another question regarding questions to ask about apartments. I don’t think it is being noticed in this question.

JLeslie's avatar

I just want to make sure you are considering your car insurance might go up a little bit, because now the insurance is covering a car worth more money.

How much more will you mortgage be than your rent? Also, will you be buying it with your boyfriend? Or, just you?

Keep in mind closing costs might be more than you expect.

I think it’s ok to so both a new car and a new house within a few months of each other since you have a nice cushion of savings. Do one and then the other, not both at once just for stress and time reasons. I think buy the car first if you don’t have to worry about your lease ending right away.

chyna's avatar

@JLeslie She isn’t buying, she is looking to rent a new place.

JLeslie's avatar

Oh. For some reason when she wrote apartment “hunt” I thought she meant to buy.

If it’s just renting I think it’s fine to do both things fairly close together.

chelle21689's avatar

I think after careful consideration I’ll move and then see how finances go because an estimate is just a quote right now. A good running car is important though…. I’m still in no rush to move though because my job is relatively new and I’m so anxious about whether or not I’m doing good (as some of you know I worry a lot) and tend to fear if they’ll want to keep me around and if I’m good enough. It would suck to lose a job and be stuck with a lot of bills….

Earthbound_Misfit's avatar

@chelle21689, find out how much your payments and insurance etc. will be for your car. After you move, put that money away for three to six months. If you can manage easily then you know you can afford to buy your car. If you struggle, don’t do it.

chelle21689's avatar

Thanks everyone!

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