Buying a Car: College Student Edition
Maybe you received a car in high school as a gift, or perhaps you purchased one with the hope of it lasting until college graduation. When Old Faithful doesn’t last as long as you planned and it’s time to shop, where do you start? Check out these key considerations to make before planning the trip to the dealership.
1. Don’t Let Sticker Shock Scare You Into Becoming ‘Car Poor’
If you have a parent or guardian assisting with the monthly costs, that’s great! You can learn a lot about the auto loan process while they are handling the financials. Make sure to discuss with them budget and estimate the additional costs for the vehicle.
Car Shopping Tip #1: According to Kelley Blue Book, a car payment should not exceed 15 percent of your take-home pay. Learn more about understanding auto loans with this quick video.
Car buyers spend 59% of their time online researching.
2. Payments: Insurance, Maintenance, and Other Costs to Consider
As you start to calculate an auto loan that seems reasonable for your budget, don’t forget to include other costs including auto insurance, gas, and additional maintenance such as oil changes or new tires.
Car Shopping Tip #2: A used car can be a good decision for students on limited budgets. There is typically a lower purchase price than for a new car, and you can use the savings to help cover the cost of ownership. Use our free ‘How Much Car Can I Afford?’ financial calculator to see what a reasonable monthly auto payment might be for your budget.
3. When it Comes to Car Selection: Are You Driving Across the Country or Have a Local Commute to School?
If you live in town and commute to a local university, you’ll need a reliable car to get to class on time. If you drive thousands of miles away to board at a coastal college, you’ll need a reliable car, too, but for a different reason. Some older cars work just fine for traveling short distances, even though their aging systems would have trouble supporting a 16-hour drive.
Car shopping Tip #3: If you decide to buy used, and you don’t have much experience inspecting cars, buying a certified pre-owned car is an excellent option. The certification means that there are no mechanical problems or safety issues at the time of purchase and typically includes a warranty.
Read more about our new and used auto loan options.
Let American Eagle Credit Union help get you back to school with an affordable auto loan. You can begin the loan application process today. Questions about applying for an auto loan? Call our member Contact Center at 1-877-325-2848 or send us an email through our contact form.