Car shopping can be stressful on any budget, especially if you’re a college student who’s on a particularly tight budget. Here’s a quick guide of things to keep in mind if you’re in the market for a new vehicle. And, if you’re not, bookmark this article to have when you’re ready and keep your college student budget on the right track!
Pay attention to both the city mileage and the highway mileage. If you’re likely to spend most of your time driving longer distances, these numbers really can make a difference to your wallet and overall budget. A smaller, more compact car is going to get around 29 miles per gallon with city driving and about 38 mpg on the highway. The great thing about buying a newer vehicle is that even the larger, mid-sized cars are getting better gas mileage — around 35 mpg from what I’ve seen. If you’re looking for an SUV, don’t let the supposed lower gas mileage scare you away from checking them out; they’re getting better gas mileage these days, too.
Lease or buy?
Leasing your vehicle is sort of like renting your textbooks and could save you money. Consider leasing your new vehicle if you’ll be able to stay under the maximum miles per year for the term of the lease. Some dealers offer 10, 12, or 15,000 miles per year. This may seem like a lot, but if you drive more than an average of 30 miles per day, you’re likely to go over the 12,000 mile maximum and will have a hefty bill once you turn in the lease.
Loans and insurance
The length of your loan depends on how much you want your monthly payment to be and how much you have to use as a down payment. If you buy from a dealer, their financial advisor will help you determine which length is right for you. If you’ll be using student loan money to help make your monthly payment, you may want to look for a longer length such as a 72-month loan. Beware that the longer your loan is, the more interest you’ll pay overall.
One option available is to finance your vehicle for 72 months for a lower payment, and when you have extra money from birthdays or tax returns, pay extra toward your principle to help pay off the loan quicker. Check with insurance companies to see what your premium would be for coverage. MSN Money also has a handy car insurance comparison calculator on their website. You can search for the national average on a yearly premium for all SUVs or you can do a search on Chevrolet car rates in Michigan, for example.
Qualify for any discounts?
Do you have an immediate relative who used to work for that line of vehicles? What about a student discount (Ford is offering a student discount right now!) or recent graduate discount? Many dealers are offering money for trade-ins as well. The September 12, 2011 post “The College Student and Grad Guide to Car Discounts” by Jamie Page Deaton in U.S. News & World Report advises car shoppers to ask for any, and every, discount available. There may be college student discounts for your car insurance, too.
What about CraigsList?
Listen to your gut feeling. If the price seems too good to be true, it probably is. And, please, bring someone with you when you go to check out the vehicle. This person can simply stand behind the scenes and watch the seller’s mannerisms, and may notice things you wouldn’t.
Just remember, while in school you should be looking for a vehicle that is practical and not just stylish. There will be a time later in your life when you’ll be able to get that new sporty car when you’re in the working world. Good luck!