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Dear Dr. Don,
I'm 18 and I am trying to save for college and buy a reliable used car. How much should I save up before buying a car?
-- Mike Motoring
Dear Mike,
Unless you're planning on financing the car, you need to save up enough to buy it. Ask yourself how much you have to spend on a reliable used car.
You'll have to do a little shopping and soul searching to figure that one out. I vote against buying a Yugo like Nick drives in the film "Nick & Norah's Infinite Playlist." Bankrate has an entire channel devoted to auto news and advice.
Start out by doing a little research on reliability, repair costs and functionality. Consumer Reports offers an invaluable guide to buying a used car. Either use a copy at the local library or pay for an online subscription.
Talk to your insurance agent about models that are less expensive to insure. Auto insurance for an 18-year-old male is crazy expensive. Managing that expense is important.
The Edmunds Web site has an interactive work sheet called "True Cost to Own" that estimates the annual expense of owning a vehicle for five years. It works for both new and used vehicles, but you can only go back to the 2003 model year when researching used vehicles.
College costs are a different animal, but I'd lobby for you to invest in your education and take out loans to fund school now rather than waiting around for years while saving up. Talk to the financial aid office at the college of your choice to see what's available in scholarships, grants and loans.
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