Hi everyone - I'm 22, graduated from school 6 months ago, and have done a decent job handling my finances so far. Recent car problems, however, have thrown a fork in things and I would appreciate any advice. Here's my situation:
Salary: 60k/yr with stable company
Rent: 300/mo (could change to 400-500 in fall)
Investments: Invest up to 4% company match
Employee stock program: Invest 1%
Roth IRA: Was able to save 4k for past tax year and already have 2k in
for current tax year
Student Loan 1: 6500 @ 7.65%
Student Loan 2: 18000 @ 4.75% (will drop to 3.25% in a few months)
Problem: Current car just died and is beyond repair - I will not get
anything for a trade in.
(1) Purchase high mile (100k+ miles) Honda Accord for around $6-10k
from dealer or private
(2) Purchase 2004 Volvo S40 w/ 30k miles and still 1 year of factory
warranty from a colleague for $17,000. My thought here is that I know
the owner - it has recently had exhaustive 30,000 mile checkup and had
no problems, car will probably last me a long time and have a higher
My worry with option (1) is that I could get stuck in a similar
situation where engine goes or something and I will be pumping enough
money in the car that it really wouldn't be much of a difference from
option (2). And the car in option (2) is REALLY nice.
Thank you for suggestions!
- posted 12 years ago