Family member needs a car for work, but only has ~$3k in cash

Submitted by Acrobatic-Draft-4557 t3_10plsf9 in personalfinance

I have a family member (40M) who was in a car accident, and now needs a replacement vehicle. He is asking for my advice. Here are some facts:

  • Money for down payment. He does not have any savings. He still owed about $1k on the vehicle that was totaled. The car’s bluebook value was about $4k. So he might have ~$3k for a down payment.
  • Income. He earns about $90k per year.
  • Job security. He has been having issues at work and is currently interviewing at other jobs. I think he should be able to find another job that matches his current salary, but I wouldn’t be surprised if he spends at least a little bit of time between jobs over the next couple of years.
  • Credit. He said his credit was “poor.”
  • Needs. He has a long daily commute (~60 miles) and there are zero public transit options. He drives a good bit generally, and probably accumulates about 20,000 miles per year.
  • Previous car payment. Previously, he was paying $300 per month.
  • Desires. He wants a mid-sized SUV has been mostly looking at used cars costing ~$20k with about 25k miles on them.

The Wiki advises to pay at least 20% for a down payment, never to get a loan longer than 4 years in length, and to pay less than 10% of your gross income towards all vehicle expenses. He only has $3k in cash, so I think following this advice would limit him to a ~$10k budget.

Cash up front = $2k down payment + $600 sales tax + $300 in fees = $2,900

This seems really limiting. He absolutely needs a reliable car for work. Can you get a reliable car for $10k these days? Any advice for him?

I understand that this is a challenging situation. I’m trying to help him work through his options. For context, he is a really good person but struggles with autism. I would like to show him this post, so please try to be kind.

Thank you!

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fawningandconning t1_j6l6mxb wrote

Where is all his money going! Making nearly $90K a year and can't save anything over a few grand?

It's very hard to find reliable vehicles for 10K but not impossible. He is probably going to need to look into other jobs or borrowing from family if his credit is bad.

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Acrobatic-Draft-4557 OP t1_j6l9kgr wrote

Thanks for the response. I don't know where the money is going, but I really can't do much about that. He hasn't asked me for help managing his finances, and he doesn't respond well when others try to intrude on that.

He is asking me about what he should do with respect to the car. So I'm trying to give him the best advice I can on that question.

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fawningandconning t1_j6l9yw8 wrote

He is going to have a very hard time and should temper his expectations. Look at police seizure auctions or similar or government surplus sales, as they will be high mileage but you can get them cheap sometimes. Financing may be his only option but he's going to get ruined on the interest rate.

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Danymity831 t1_j6ml7fi wrote

>Where is all his money going! Making nearly $90K a year and can't save anything over a few grand?

Yikes, for real tho! Should have had an emergency fund or some kind of budgeting.

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truffleart t1_j6lamp7 wrote

Your family member needs to get his financial **** together. Forget about all the numbers you shared - the big problem is his credit score. He will get eaten alive by the interest rate - and needs to minimize the loan size as much as possible.

My choice for a reliable high mile commuter in a $4-6k range would be a 2010+ Nissan Sentra/Versa. That little engine is bulletproof, as long as you stay away from CVT transmissions.

Once he gets his credit history on track, should be no problem buying a new/gently used vehicle of his choice.

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theoriginalharbinger t1_j6ld1jb wrote

Poor credit? Long commute?

Sounds like a candidate for our perennial favorite, the beige Corolla.

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DoubleHexDrive t1_j6ls744 wrote

I bought a 2013 Mazda 3 for $8K in cash last year. Runs like a top and is actually fun to drive. You can find something small with good mileage and low cost until he’s in better financial shape. Honda Civic or Accord, Mazda 3 or 6, etc.

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CircaSixty8 t1_j6m68f8 wrote

I'm not trying to be mean, unless there's a significant amount of medical or student loan debt involved, a poor credit score at the age of 40 is the result of ongoing bad financial choices.

There's nothing even close to realistic about getting an SUV with 25,000 miles on it for $10,000, and besides, driving a gas guzzling SUV 600 miles a week is a terrible idea.

I'm sorry, but you're talking about a grown man, right? Why are you figuring out his problems for him?

Edited for typos

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Jedi_Lazlo t1_j6l7f6l wrote

Check the impound yards. Might get lucky on a lien sale vehicle.

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Acrobatic-Draft-4557 OP t1_j6l9lxw wrote

Thank you!

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Distributor127 t1_j6mmhs1 wrote

This can be good advice. My Dad just got a dodge dart with just over 100,000 miles the other day for I think $1400. Front bumper cover is junk. He got a minivan for about $900 before that. He put $1000 into it and its really nice. I know a guy that got something not quite as nice at a dealership for $7000.

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Jedi_Lazlo t1_j6nzrak wrote

California has a minimum 30 day impound for both DUI or driving on expired registration. A lot if the time these vehicles are abandoned instead of paying the impound fee. A lot of decent cars bought for teenagers that they lose from stupidity mostly.

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GeorgeRetire t1_j6l8d1l wrote

>Can you get a reliable car for $10k these days?

Probably. Perhaps not a mid-sized SUV with only 25,000 miles, though.

​

>Any advice for him?

Might consider getting a second job. Not having any savings means he doesn't have any options.

He should work hard on interviewing for a replacement job if this one is insecure. He doesn't want to spend any time "between jobs" with no savings.

Figure out where all that $90k is going. Find a way to reduce expenses.

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Acrobatic-Draft-4557 OP t1_j6l9vxu wrote

Thanks for the response.

As I said to the other commenter, I don't think I can have much influence over these broader personal finance decisions. He's made it pretty clear that he's not interested in my opinion on that stuff. So I'm trying to just be non-judgmental, and give him the best possible advice on this narrow car question.

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CookieAdventure t1_j6lnzue wrote

He needs to talk to his bank or credit union to try to get pre-approved for an auto loan. Once he knows how much he can spend, he can start looking.

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calculatedDisaster t1_j6ndldv wrote

Honestly this is a tough one there’s so many red flags here.

My biggest recommend would be drop the idea of an SUV. On how much they currently drive that’s a big waste on gas, wear, tires, insurance, etc. Go for an economic car. Their old car payment was also pretty bad considering the car is worth 4K so they either took out too long of a auto loan or got an awful interest rate or both.

I got a 2018 Mazda 3 very good condition CPO ~40k miles from a Mazda dealership for $15k in early 2021. It was used as a business vehicle when business flew in. When processing the loan I actually got an even better deal because they valued the car higher.

I don’t think you’d get the same today but someone else mentioned getting a 2013 Mazda 3 for $8k last year.

Look at credit unions for best auto loan rates. Get comprehensive insurance this time to cover the loan if an accident happens, most require this anyways.

No oohing and ahhing about not getting a SUV or the car they want. To bad at that salary and age they should have at least decent credit and a savings, there’s no one to blame but themselves for the lack of options. They’d be lucky to get a half decent car with the cards they’ve set themselves up with.

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