“I have $400 saved and a car on its last legs”: Should I buy or lease a car to get through my apprenticeship with a $90k-$100k projected future salary?

Hi Money Minder,

I’m in a bit of a dilemma with my car situation. Currently driving a beat-up 2010 Ford Escape with more than 200,000 miles on the clock. It’s falling apart, and I’m not sure if it’s worth sinking money into repairs. Thinking of getting a lease, but also considering financing a used car in the $12K-$16K range.

I’m in an apprenticeship program and need reliable transportation for the next three years. I make about $49k now and will be making around $90k-$100k when I graduate in 2027. I can handle a $200-$300 monthly payment but only have $400 saved up. My credit score is 697 with some student loan debt and a couple of credit cards.

Any advice on what I should do? I’d appreciate your thoughts on this!

Thanks, Future Car Seeker

Response from THE MONEY MINDER:

"Hello There,"

Hello there, it sounds like you are in a bit of a predicament with your current car situation. First off, congratulations on being part of the IBEW apprenticeship program, that’s a commendable achievement. I’m sorry to hear about the state of your car, it seems like it’s definitely seen better days.

Given your financial situation and goals, it might be a practical approach to aggressively save a bit more and finance a used car in the $12K-$16K price range. Considering your current vehicle’s condition and the potential repairs needed, putting more money into it might not be the most cost-effective solution in the long run.

You mentioned that you could comfortably afford a $200-$300 monthly payment, and it’s great that you have a plan in mind. However, with your current savings and credit score, it might be a good idea to focus on building up your savings a bit more before committing to a new loan. This will not only give you a stronger financial cushion but also improve your chances of getting a better interest rate on the loan.

For now, it might be wise to continue using your current car while saving up for a down payment on a new vehicle. In the meantime, keep an eye out for good deals and explore your financing options to ensure you get a vehicle that fits your needs and budget when the time comes.

I hope this advice helps you in making an informed decision. Best of luck with your research and future car purchase.

Farewell from THE MONEY MINDER.