Buying your first car can be an exciting experience. For some college students, it’s their introduction to independence. There are many ways you can prepare yourself for this big purchase; here are some tips for staying on budget while getting a car that fits your style.
Before Purchase
As excited as you may be to walk into a car lot, there are prior steps that should be taken to ensure that you are meeting your needs while staying on budget.
Check your Credit Score
As a college student, you have more than likely never made a big purchase that involves having to check your credit score. If you plan on financing or leasing your car, your credit is something that you must be aware of, as well as understand, before making a big borrowing decision. When looking into your credit, it's important to know that a good credit score can get you better loan terms than a lower one. College students usually have lower scores due to their limited credit history, so you may need to build your credit in preparation for this big car purchase.
For tips on how to do so, check out the Credit section of our blog.
Set a Budget
College students have many expenses that must be considered before deciding if they can afford a car. When setting a budget that doesn’t hurt the bank, investigate what you have in your savings, your current income, and expenses. Understanding that this car purchase is just the beginning of responsibilities and expenses is important in deciding if this is the right decision. Other expenses you will have to consider throughout the year are gas, insurance, and regular maintenance.
Research
Setting your financial boundaries is important, but so is getting a vehicle that fits your needs. Do research on the different styles of cars and features. Whether you’re looking for a new or old car will also affect what route you decide to take financially. If you aren’t as informed about car makes and models, investigate brands that interest you and read up on consumers and their experiences.
We all want the flashiest car, but it's important that you separate your needs from your wants and look into what car will be best for you. Think about what your daily use of your vehicle will be. Do you commute to campus? You may want something that doesn’t consume a lot of gas. Will you be driving in winter conditions? Maybe an SUV is your best choice. Taking these things into consideration is important in making a choice that suits you.
During Purchase
Once you have set up your budget and chosen the type of car you want, you can finally begin your search. The following are some pointers for navigating a car dealership.
Test Drive the Vehicle
If you’ve followed the above tips, then you have researched this car inside and out and may feel ready to take it home. Before doing so, test drive the vehicle to see if it drives as expected. Pay attention to how it feels, how everything runs within the car. Does anything feel off? If you are unsure about something, bring it up to your salesperson.
If you’re buying a used car, request a vehicle report to learn of any prior accident or mechanical reports on the vehicle. If you’re not familiar with how cars should run, bringing an added person that is more informed on cars can help you know what questions to ask and feel confident in your decision.
Negotiate
Sellers are often looking to move the car out of their lot as soon as possible. But, don’t feel pressured to buy a car right away. You want to make sure that you get the best deal possible, so making a counteroffer is a great way to get them to come down on their price. Some things you may want to negotiate are your APR rate if you’re getting a loan, the total car sales price, and added features or perks they can include, such as free oil changes or inspections. Don’t be afraid to negotiate a deal that is most comfortable for you, because at the end of the day, it’s your money.
One way to get a great deal is by having your financing in hand before you go to the dealership. A preapproved loan gives you that power. At PSECU, we call these AutoDrafts. It works almost like a blank check and is valid at any authorized dealership. Learn more here.
Other Resources for College Students
As a college student, you may be offered benefits that can alleviate some expenses during the car-buying process. If buying from a commercial dealership, ask them what student offers they currently have. Most dealerships offer discounts to current students and recent graduates. Car insurance companies also often offer discounts to students based on their grades, so if you’re someone who is excelling in your courses, do some research on how this can help you on the road.
As you go through the car-buying process, stay focused on finding a car that meets your needs and budget. Don’t feel pressured to make the commitment before you’re ready. Take your time and continue your search.
For more money tips for college students, visit our blog.
