Student Loan Repayment

I'm a 21 year old junior at the University of Kentucky. I have a gas guzzling jeep that is killing my monthly budget. I am looking at buying an 07 or 08 Toyota yaris, for its reliability and gas mileage (30 mpg). my plan is to take out a private student loan for the amount of the car ($13-14,000) and defer payment until I graduate. I am then going to sell my jeep, probably for about 7 - 8,000 dollars and invest that money plus about 1100 dollars of savings in a CD. With the money each month I'll save in gas, I'm going to put 200 a month in my brokerage account. When I graduate i'll cash out the CD and my brokerage account to pay back the loan. I may come up a little short, but I think that overall I'll be in better shape than if i trade in my jeep and take out a traditional loan. Basically, I'll be trading my old jeep for a brand new car and have the whole thing paid off in no more than three years. What do you guys think?

I think you should read your loan documents VERY carefully. Most student loans ban the purchase of automobiles with the loan proceeds. It's cause to make the note fall due immediately, in full.

Not to mention that in this economic climate, you can do MUCH better by going down to the dealership, and getting one of their 0% or 2.9% or even 4.9% offers for a used car. The student loan is NOT going to have an interest rate that low. Sell your Jeep for as much as you can, and use the money for a down payment on the Yaris.

Any reason why you are not considering a used hybrid, if you're worried about fuel efficiency? I got mine for $17k.

I've decided not to buy a new car, I'm looking to buy something comparable in price, year and mileage to my jeep, but that gets better gas mileage. This way I won't be taking on any debt put I'll be able to save money on gas. This way I can come out of undergrad completely free of debt. Which will not be the case after grad school.