From: jIM 
Newsgroups: misc.invest.financial-plan
Subject: Re: Advice - College Grad & Car
Date: Mon, 28 May 2007 18:01:04 -0500
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On May 28, 1:04 pm, teaks  wrote:
> 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.
>
> Options:
> (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.  

Open up and look for options 3, 4 and 5.  For 17k you could probably
buy a new Honda which would last 10-15-20 years.  For half that, you
should be able to find a Honda with less than 100k miles.

look for option 5: a car which costs 2k which you do not have
finance... pull the 2k IRA payments out if you have to for 2007.
Don't go into debt beyond your means for a short term problem.

If you finance the car, my suggestion is take the highest payment
possible (like 2 years instead of 3 or 4 yr financing).

If you post a budget of where you spend 4k per month take home, then
the advice received might change.