greenmood Posted July 2, 2012 Share Posted July 2, 2012 In August, my family will need a second car. It seems ridiculous to think so since it's just the two of us and we live in a city with ample public trans, but there it is. I'm wondering what the prevailing wisdom is on using student loans to buy something used outright. I took out WAY less than the max amount this year, so I could get more. I also have very good credit, so I could probably get a loan from a dealer (although I've never bought a car before so I don't know how that works). Any thoughts are welcome. Link to comment Share on other sites More sharing options...
joanna.nola Posted July 2, 2012 Share Posted July 2, 2012 If you have to take out the Grad Plus loan (not subsidized), it might work out to be cheaper to get a car loan. Grad Plus loan accrues interest while you are in school if you don't pay on it. However, if you get a car loan you do have to make those monthly payments. I would find some online calculators and do the number crunching. Link to comment Share on other sites More sharing options...
cinntsp Posted July 3, 2012 Share Posted July 3, 2012 Having good credit won't be enough without verifiable income unless you can get a cosigner or two. Link to comment Share on other sites More sharing options...
Sparkles9708 Posted July 3, 2012 Share Posted July 3, 2012 Agree in order to get 0% financing and not have a cosigner I had a really good credit score, little undergraduate debt, and had to show a current pay stub. Hopefully you can maybe get a cosigner. Like soeone else said though I would crunch the overall numbers to see if a dealership loan or the other would suffice. I had to get a newer car last year and did not want a car payment, but in order to also have a reliable vehicle I had no other option. Link to comment Share on other sites More sharing options...
greenmood Posted July 4, 2012 Author Share Posted July 4, 2012 Hmm. Yes, it would be a Grad Plus loan. I'm wondering at what price point a dealer loan becomes a better bargain than taking out more in Grad Plus. I know what my interest will be on the Grad Plus, the dealer loan is an unknown quantity that depends on my own credit and whatever I can negotiate when I buy the car, correct? I would hate to go to a dealership, find something that works great for us, and then learn the rate they're offering is ridiculous and have to back out. But I also don't want to take out the Grad Plus money if there's a better deal out there. I'm realizing how little I understand this car business. Link to comment Share on other sites More sharing options...
cinntsp Posted July 4, 2012 Share Posted July 4, 2012 Hmm. Yes, it would be a Grad Plus loan. I'm wondering at what price point a dealer loan becomes a better bargain than taking out more in Grad Plus. I know what my interest will be on the Grad Plus, the dealer loan is an unknown quantity that depends on my own credit and whatever I can negotiate when I buy the car, correct? I would hate to go to a dealership, find something that works great for us, and then learn the rate they're offering is ridiculous and have to back out. But I also don't want to take out the Grad Plus money if there's a better deal out there. I'm realizing how little I understand this car business. Find a car make that is offering great mfg incentives(i.e. 0% or 1.99% for X months) or try a credit union. The rate is going to be based on more than just your credit because you have no income so you will need a cosigner. Paying grad plus rates for a car is pretty crazy. If going that route, just buy something used for $3-4k outright that you can use for a couple of years. You should really invest some time into researching this process so you don't get hosed. Link to comment Share on other sites More sharing options...
greenmood Posted July 4, 2012 Author Share Posted July 4, 2012 ;) Am definitely doing that. Link to comment Share on other sites More sharing options...
jen0508 Posted July 12, 2012 Share Posted July 12, 2012 why dont u take out a loan with your bank? my car broke down during PA school so i had to get a new one. i was a few months away from graduation so i went ahead and got my "dream" car. i didnt want to mess with the dealership so i got a cosigner and got a loan pre-approved through USAA for a certain amount before i went car shopping, already knew what the interest would be and even had a payment plan already. They have it so that you can print out the check for the dealer, it was pretty simple. your bank may have something similar. btw the interest was much cheaper than grad plus. Link to comment Share on other sites More sharing options...
jsfelder0417 Posted July 25, 2012 Share Posted July 25, 2012 If you have USAA, they are the first ones I would talk to, but most don't. Second I agree with checking out a credit union-some even have loans set up specifically for students with deferred interest and payments. Link to comment Share on other sites More sharing options...
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