Graduated Learning: Life after College

I got my degree, I got a job…now what?

Loan payments getting real September 30, 2008

Filed under: Personal Finance — Stephanie @ 10:31 pm
Tags: , , , , ,

I came home on Monday to see a few important-looking pieces of mail on my kitchen table.  And they both had to do with my new car.  One was the official paperwork from my car insurance.  I’ll admit, I’m not quite sure I understand everything relating to my car insurance.  It’s possible that I didn’t get a good deal, or that I got the wrong sort of coverage.  I’ve decided that reading through the information can wait until this weekend, when I can actually work through it to make sure I understand what’s covered and if I got all the correct discounts and everything.

The other piece of mail came from the credit union that I got my car loan from (through AAA).  I think this piece of mail really made the payments hit home.  I received my “Loan Payment Book”.  It’s basically a booklet with tear out pages with the amount due that I’ll send in every month.  I’m pretty sure that I can do this online (not 100% certain), but hopefully that’s the case, as I’m not really keen on paying for postage every month, and risk not paying on time.  I realized that there are two different ways to look at this booklet.  I can either look at it and feel overwhelmed:  look at all these payments that I’ve got due each month.  I’m going to be paying for this car (with interest) until almost the end of 2013.  Or I can look at it as an easy thing to accomplish:  I’ve only got to pay this amount 60 times, and then I own the car free and clear.  Granted, either way I look at it, I’m hoping I can pay this off sooner, which will lower the total amount I’ll end up paying.  But it’s definitely a visual plan that will help me to see progress towards owning my car.

So, we’ll see.  I’ve mentioned in the past that I hope to pay down all my debts a lot faster than the banks would like me to.  But this does make me realize that I should actually have a plan for paying off my debts.  I know plenty of people talk about debt snowballing, and I’m pretty sure I’ve seen a link from another blog to this before, but there’s a pretty simple site to help you figure out just how long it will take to pay everything off.  Now, instead of telling myself (and you all) that I’m going to pay “extra” every month, I can actually look and see what amount I should pay.  Sounds like this could actually provide results.

One can only hope!

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I bought a car! August 24, 2008

Yep, you read correctly.  I bought a car.  Technically I don’t have it yet (it’s in transit) but I’ll have it in about a week.

I first went to Herb Chambers Honda to test drive a Civic.  When I got back, all I really wanted to know was what sort of price they were going to be able to give me.  But they definitely gave me a bit of a runaround, and I felt very pressured to buy the car right then and there.  I was there alone, and really wasn’t ready to make any decisions just yet.  They kept pointing out that they could accommodate any monthly payment my budget would allow.  I kept asking what interest rates they could give me, or the lowest price they could sell it to me at, and they continually changed it from rate to monthly payments…very sneaky.  Because, as you and I know, you can basically make a monthly payment of any amount, as long as you stretch out the payment schedule long enough.  And who wants to pay all that extra interest?

So, that was Tuesday.  I was busy the rest of the week, until Friday evening.  This time, Aaron came with me.  We went up to Commonwealth Motors.  I took another test drive with the Civic they had available.  The woman that showed me the car was really friendly, and took me around the dealership to see all the benefits they had.  I could tell what she was doing, but I let her show me around.  We started talking about cars, and I asked if they could go any lower on the price.  Like at the last dealership, she got her supervisor, who is more likely to actually make a deal.  So he said he could go as low as $17600, which was okay, with an MSRP of $18,430 or so.  Still, I wasn’t quite ready, and wanted to test drive other cars.

So, Saturday morning, I got an email from Herb Chambers Honda (yes, I gave them way too much contact info).  I called them at the number they mentioned, and the guy got his manager, who said they could probably match the price I got at Commonwealth, and that I should come in.  Well, Aaron and I headed over there, and since his car needed a tuneup, we dropped it off at the nearby dealership, (free parking!  except for the cost of the repairs not covered by his warranty)  and headed over to the Honda dealership.  It turns out that they didn’t have any more of the Civics in blue, which was the color I was hoping for.  They did say that they were willing to go as low as $17550, but that they couldn’t go lower than that.  I wasn’t too keen on buying a car without trying any other types of cars, and I also knew that Commonwealth had a few blue cars coming in, so I figured I’d wait and get back to them.

The manager actually offered to have the salesman drive us over to Herb Chambers Toyota in the manager’s car, which I thought was really nice.  Maybe they were hoping we’d come back, or they just wanted to be good guys, but either way, it was a good thing.

We got to Herb Chambers Toyota and had to wait around a bit.  All the salespeople were busy with other customers.  However, a man named CK, who apparently works more in the internet sales department, saw us waiting and offered to help.  I appreciated that.  I told him I was looking for a Corolla, and he had us go out on a test drive.  I found the car to seem a little more “normal” compared to the Civic, which seemed to have a bit more “space age” look to it, especially when it came to the dashboard.  I also noticed that the Corolla had a smoother ride.  I guess they say that it has a looser suspension, which means you feel less of each of the bumps on the road.  The salesperson at Commonwealth said that that meant that the Civic and other cars that touch the road more are safer because you’ll always be on the ground.  I’m not sure how much I believe that.

So, we talked a bit more with CK, and he was really nice.  I felt a lot more comfortable there than at the other dealerships.  I collected as much information as I could, and then Aaron and I headed over to the Super 88 food connection to grab some lunch.  It was pretty darn tasty.  I was going back and forth on which car I preferred.  I knew that really, it was my decision, not his, not my family’s just mine.  And I really hate making decisions (it took us a while to figure out which place to get food from!)

In the end, I decided that the Corolla just felt better.  The smoother ride and more normal looking/feeling car appealed to me.  Not sure if it was because it was the last car I looked at, but either way, I figured I couldn’t really go wrong.  I figured that if I could get a similar deal on the Corolla as was promised on the Civic, I would be happy.

So we headed back, and CK found a car fitting my needs (the Corolla LE) and was looking for a blue car for me when he found the listing that showed that ZERO blue cars were being made for them.  I’m not sure how exactly that happened, or what exactly that meant, but I had to decide if the color was that important.  Luckily, my second choice, silver, was available in the trim level I wanted.  I opted for the LE over the base (CE) because it had power locks, power windows, cruise control, and a few other options.  Yes it’s more expensive.  But I wanted to be happy down the line.

So I was handed off to the actual salesman, and he was able to give me ~$1000 off the MSRP.  In retrospect, I should have asked if he could go lower, and I’ll probably be kicking myself down the line for not trying to get it lower, but there it is.  I signed forms that scared me, and put down a deposit.  My car will be in off the trucks in about a week.

It’s a strange feeling.  It was such a big decision, moneywise.  I know I’ll be happy in the end, but I also know I probably could have gotten a cheaper car if I had gone for a used car.  I’m getting my loan through AAA, like I mentioned before, and they’ve got a rate better than the dealerships could offer (they don’t have deals on the fuel efficient cars because they’re already in such high demand!)  So, I’ve got to decide the length of the loan (likely 3-5 years).  Luckily, they don’t have any added fees for prepaying (I wonder if that also means if I completely pay it off early they wouldn’t have a problem with it) so I could technically get rid of that debt sooner.  It actually is the lowest APR of all my loans…4.49%.  My fixed rate student loans are at 4.5% (not too much higher) and my variable rate loans are currently at 5% (though that wont always stay).  It’s another barrier towards being debt free.  And unlike education, you can’t quite label a car purchase as “good debt”.  But I do plan on having this car forever (relatively speaking), and so I’ll try to get my money’s worth.  I just need to buckle down and work even harder at paying off my debts.

Next step is getting car insurance.  I’ll let you know what happens with that.

And now it’s time for bed.  I’ve got to get up early for work tomorrow so that I, you know, can make some more money to pay off all those bills.

 

Buying a car: updated August 17, 2008

Filed under: Personal Finance — Stephanie @ 5:35 pm
Tags: , , , , ,

So, it seems that there are a few posts floating around the blogosphere about buying cars.  First off, Kendall followed up her last post with a more detailed description and reasoning behind her purchase.  I also saw that Trent at The Simple Dollar posted a discussion on Leasing vs. Buying new vs. Buying Used.  And then The Consumerist linked to a post at the Consumer Reports Cars blog about the most fuel efficient cars in certain cost brackets.  So this has definitely helped me with my decision.  I’ve also found myself looking around at the cars near me on the highway (but I keep my eyes on the road!).

Reading those posts, along with talking to friends and family, I’ve narrowed down my choices quite a bit.  I’m thinking my top choice is a Honda Civic, and my second choice is a Toyota Corolla.  I made this decision based on price, gas mileage, other owners’ experiences, and style.

I’m leaning towards a new car, since I plan on owning a car, and as my friend Patrick said:

Basically my advice was to buy a “lower grade” new vehicle vs. “higher grade” used vehicle. I bought a EX Honda Accord because I was looking for leather and sun roof and speed, etc. In the end I should have bought a brand new Honda civic (or similar) for the same cost without all the amenities. It’s hard to know what’s happened to your car before (mine is fine, but it has some quirks that always makes me nervous when something seems like it might go wrong).

Basically my advice was – if you’re on a budget and you can buy a reputable good car w/o every amenity, that’s better then buying a used car with everything “blinged out”.

I thought that was pretty good advice.  And I agree with him.

As for how I’m going to pay for the car, this is where all the tricky personal finance stuff comes into play.  I’m starting to realize that I might just have to get a loan.  I could technically use up all of my savings to pay for the car, but that really is not the best idea.  And while there is not likely to be a loan out there with lower APR than my ING account is getting, it’s better to have a bit of savings around than to have less debt (in my opinion), mostly because it’s important to have an emergency fund sitting around.  So yes, mathwise, it’s not the best choice, but emotionally and for hedging against going into more debt if an emergency happens, the loan is a better choice than taking all the cash out now.  Besides, I’ll still need to pay for insurance (another whole collection of decisions).  As for where to look for loans, I’ve gotten a bit of advice.  My friend Craig mentioned that he found a local credit union that has pretty good rates, especially if you have another account there, and that the credit union also discounts your rate if you do automatic payments.  And my mother pointed out that AAA (which is probably a good thing to have anyway if you have a car) has car loans for pretty reasonable rates.  So I’m looking at that too.  I’m guessing it’s a good idea to have the loan ready before you buy a car, but I’m thinking I should at least go take a few test drives to determine if I like the cars that are at the top of my list.

Well, hopefully I can get over to a dealership some time this week to get my next car buying step going!

And thanks guys, for your advice!  I really appreciate it.