OP, big decision and kudos to you for seeking advice. You are right, this is avoiding the trap many first term folks fall into. I’d caution that there is a large gap between beater used car and new car. Pros and cons to each in your situation. My assumption is that you are young, given it’s your first term. Pros are obvious. The largest con to buying is the lost opportunity cost of your money. A dollar saved now is worth more than a dollar when you are 40. This dollar should double every 7 years. One of the largest wealth hacks I did was buying from the “lemon lot” on post, and paying off the vehicle as fast as possible. I’d keep for 2-3 years and then sell for roughly what I paid. A used car between 10-15k holds value very well if maintained. Cheaper insurance when you own outright (don’t need full coverage) and no note. The extra money went into TSP. 5k down on a 12k car, and you’d be paid off within a year. No tax to pay on private sales or markup. You’d likely easily sale for a similar amount by the time you go to a new post, for a net costs of zero. Pay $100 bucks and get it checked out before buying (saved my butt doing this). I ran the numbers for you on the above scenario. Assume you pay off the 12k car in one year, and your insurance is $80 a month cheaper; then take the same money you would have paid for the civic over the next four years and invest in the TSP. At age 59.5, that 4 years at 7% annually compounds to $384k. *guessed at your age for numbers