MoneySmart ?

[crazy4deals]

Hi---

I have a question. If one comes into a small windfall and plans on using the money to finance a used vehicle, what would be the smartest thing to do? (see choices below)

a.) pay off some minor collections to get credit score up some
or
b.) put all money towards car downpymt to finance less an amt
or
c.) some other better idea ???

Let me know. Thanxs!

[Broken Arrow]

Re: MoneySmart ?

Well, I for one believe that vehicles should be further back in the list of priorities because they are a depreciating item. It would be much better to pay off a credit card or pay down the mortgage.

However, if one desperately needs a vehicle for the express purpose of being able to commute to your job, then I would say it's probably OK to use the windfall for that.

My $.02

[sweeps]

Re: MoneySmart ?

Going on the assumption that you've already made the decision to buy a car and soon...

Your best bet, in my opinion, is to use your windfall toward a bigger down payment. Paying off collections is obviously the best long term choice for your credit, but in the short term (up to 3 or 4 months) it's probably not going to help you much. In fact paying off collections can sometimes lower your score in the short term because it can make old bad debts current.

[debtfreesteve]

Re: MoneySmart ?

We came into a windfall, not too long ago, and we sold our then current older jeep laredo, used the rest to move up, with a paid for grand cherokee.... runs so much better with no payments on it...

You might want to stay out of the land of payments, especially if you already have collections... Clear the collections, use the rest, if any, to move up in car, save your payments for 1 year, and move up again if you want a better car.

You seem to be in a mess, so payments on a car are the last thing you need, imho

[jmjj215]

Re: MoneySmart ?

Why the need for a new used car?

[wwjdmsl]

Re: MoneySmart ?

c. buy a dependable, older vehicle with cash...maybe some of the windfall will be left over to pay down debt....and....as jmjj215 said...is there really a NEED for a newer, used car ?

[Ima saver]

Re: MoneySmart ?

Assuming you REALLY need a car, I would use it for the down payment.

[cbmeeks]

Re: MoneySmart ?

Don't make the same mistakes I have. Try to pay cash for a used car if you can. Even if it means a temp car for $1000.

[crazy4deals]

Re: MoneySmart ?

Well i need a newer used car, because the one i have is on its last leg and fixing it would be too costly. Im not in a position to buy outright, i would have to finance the auto. I think im going to use half the money for downpymt on car and the other half to pay on some of the minor collections i have.

Thanxs for all the responses, guys!

[Broken Arrow]

Re: MoneySmart ?

If it helps any, some vehicles and brands have a higher history of reliability than others. I'm sure most of us here know about it already, but Honda Civics and Toyota Corollas consistently scored well with Consumer Reports, and they are not expensive either, especially when purchased used.

[kristinecfp]

Re: MoneySmart ?

What are the interest rates on your "small collections"?
What would the interest rate be on the car if you financed?
Do you have other debts or credit cards at high interest rates?
Do you have an emergency fund?
Do you have any retirement savings?

There are a lot of questions that need to be asked before you can make a wise decision on the best use of that windfall. Although paying cash for a car (or making a large down payment) can be a great idea, you need to take a step back and look at your bigger financial picture before you make a "MoneySmart" decision.

Best wishes,
Kristine

[b4freedom]

Re: MoneySmart ?

Hi---

Ic.) some other better idea ???

Let me know. Thanxs!

Go to Las Vegas. Maybe you’ll hit it big. j/k