Real Answers for Life’s Money Challenges
Our Prius needs repairs.
We trust our mechanic and the repairs are legit.
It has 170K+ miles on it and the newer models get even better gas mileage.
If you have more than $1,000 in your checking account,make these four moves.
We currently have two cars, but since we mostly work from home, we dont really need both.
I thought we could consolidate and get one nicer Prius.
I was shocked to see that even a 2016 Prius is going for like $18K.
The base model for the Prius Prime is $28,500 and qualifies for a $7,500 tax credit.
(Im aware that wed have to wait to get it back until we file our taxes.)
I know it would be ideal to wait and save, but our Prius needs repairs now.
Im also an online student but pay for my education with mostly grants and scholarships.
It says the government pays the interest while youre in school and for six months after.
I have two years left.
Basically, we could get an interest-free loan.
I feel confident we could pay it back before any interest starts accruing.
It seems like a great deal, but my inner frugality is antsy.
Is taking a loan ever a good idea?
If it helps, its just me and my husband, and we dont want kids.
-Frugal Student
Dear Frugal,
Im not part of the all-debt-is-terrible school of thinking.
Where this gets tricky is that you want to use a student loan to pay for the Prius.
Student loans are based on your cost of attendance for school.
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In your case, using student loan money for transportation expenses is especially murky.
Youre an online student, so presumably, you arent commuting to and from campus.
Theres an obvious work-around, though.
Im guessing those costs will add up to more than $3,500.
Then youd free up money in your budget for the car payment.
No Interest Til Almost 2027?
Since you have strong credit and its a small amount, you wouldnt pay too much in interest.
If youre confident about buying the Prius, dont hold off too much longer.
Once a manufacturer sells 200,000 electric vehicles, eligibility for the credit starts to phase out.
Its not just about the tax credits, though.
Youve clearly done the math and determined that this purchase makes sense.
Theres no sense in sinking money into repairs for a vehicle youre planning to get rid of.
Did you know?
But thats not the case here.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
Send your tricky money questions to[email protected].
