My wife and I have two children. Soon we will have three. Neither of us know how to drive, and we do not have a car. With the prospect of having three small children, however, I think having a car might be handy. The problem is that we still have study loans to pay, and surely a car, insurance, and driving lessons are not cheap and we'll certainly need another loan. We have a single income, and at the moment whatever money that we don't use goes to pay the study loans.

Would buying a car and taking driving lessons for me be a wise thing to do at this time, given our situation? Or should we wait and make do without a car until all our study loans are paid for? This may take another 5 years.

  • Don't forget the initial insurance costs of owning said car for the first few inexperienced years of your driving career (though you win a little on your age :-). I personally wouldn't pay off the student loan, it will stop taking money off you should you not have the income, and (depending on the era of loan) remains one of the cheapest loans around. – Adam Houldsworth Mar 18 '14 at 13:33
  • @AdamHouldsworth, would you mind paraphrasing your last sentence? I do not quite get it. – adipro Mar 18 '14 at 21:14
  • I was just pointing out the cost of insurance for the first few years of owning a car can be expensive (depending on the car). Not enough years of driving experience and not enough no-claims bonus. Assuming you have a student loan from the Student Loans company, you will automatically pay this through PAYE when you earn over a certain threshold. The interest rate (on mine at least) is the rate of inflation, nothing more, so it's the cheapest loan I have. I don't pay off more than the minimum because I'd rather the liquidity, and if I lose my job the payments stop until I earn again. – Adam Houldsworth Mar 18 '14 at 22:01
  • @AdamHouldsworth, I see. Unfortunately, that is not my case with the student loan. The interest rate is based on the prime lending rate, which I think is more than 5%. – adipro Mar 19 '14 at 7:43

Welcome to Money.SE. It appears there's public transportation to get you to work? And the area by your house is walkable? i.e. you and your wife can get groceries and other needs by walking.

If it will take 5 years to pay the loans even without a car, how long if you get one? Will you even be able to afford the payments?

There's not enough detail here except to say that all purchases aside from true needs have a cost/reward to consider. Whatever the car's total cost is, will it add that much pleasure to your life? People in cities with great transportation save quite a bit on the expenses a car brings.

Personal anecdote - Mom lives in a city. She never drives out of the city. Ever. Between insurance, maintenance, and gas, even with low miles, she spends $3000/yr. Once per week, she drives 1500 ft (.3mi) each way to the grocery store. Once every month or 2 to a mall 6 miles away. She can walk and groceries delivered for free. In the end, she spends $250/mo for the feeling of freedom. I get that. When I am 70+, as she is, I will gladly pay car service the $20 to drive me around.

You are young, and need to sit with your partner (your wife is your partner in the business of running the family finances, or so I hope) and decide if the benefit is worth the cost. How does she take the kids to a doctor? How do you go out to dinner?

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  • I cycle to work and have most of our groceries delivered to our door. My inclination is to pay the loans first. People have however suggested that it would be handy to have a car, more convenient to take the family out, etc., although I believe we can manage without. – adipro Mar 2 '14 at 15:22
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    @adipro: If you believe you can manage without, go for it. You can always buy a car later if you find you need to, but if you buy one now, you can't get your money back. I find that often when I hear "you should buy X, it's more convenient", X is just some consumerist fad that people have bought into without actually assessing whether they would be just as happy (and slightly richer) without it. – BrenBarn Mar 2 '14 at 19:11

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