Hey, 25 in Texas; I think I made a rushed mistake last year. I had just totaled my previous car in an accident I caused and needed one asap (had to commute to work, couldnt borrow anyone's car) with only 500$ and around 600 credit score all I could think was to go to a dealership and see what they had. There was a time pressure to get one fast, so I have a toyota 2023 corolla. Its a great car sure, but im paying 704$ a month on the loan, and 343$ for insurance. My income monthly is around 2200$. With an about 11% interest rate on 7 years, im looking at $50k total. Currently my other expenses are low, as I'm fortunate to live with my grandparents, but theyre old, and might not live to house me in 7 years.
I had the idea to save money (i can put away about 100$ a month into savings) and outright buy a much older car, then return my current car and begin paying the debt on the loan leftover. This way, I can eliminate this very high insurance (maybe) and clear the debt in perhaps 2 or 3 years? I have no real knowledge of how this works, is this a poor idea? Or perhaps there's something else I can do? I dont need to move with immediacey anymore, but I hope to be able to live on my own within 2 years.
original posted by Moobius2000 to r/personalfinance on Fri, 15 Mar 2024 07:55:48 GMT.