For many students, a car is not an optional buy. When you need to get around a lot or your school is too far away, you’ll need something to get you there. You can use public transport if the option is available but, more often than not, this takes too much time or is too complicated for a student with thousands of things on his mind.
Sure, you can find some of your college friends and ask them to drive you around, but this can’t last forever. Sooner or later, you’ll need to get your first car. Fortunately, there’s a way to purchase a car on a student budget. If you worry about how you’re going to afford this, we have some tips that should help you out.
1. Set Your Expectations
This is a decision you can’t rush into. The goal isn’t to get the car of your dreams, but the best car you can get with the money you have at your disposal.
So, instead of daydreaming and falling in love with a car you can afford, set your expectations first.
Take a look at your finances. Is your credit score good enough to get a small loan? Will you be able to cover the payments?
Banks might give you enough money to get the car of your dreams, but if you end up paying for it for years to come on a budget that barely covers your living expenses, you’ll be in a lot of trouble. And real soon.
2. Do Your Math
In addition to considering your current budget and abilities, sit down and do your math about future pay payments, car insurance, gas expenses, maintenance, etc..
Based on all this information, find out what your budget is for a car.
You’re better off buying a cheaper, used car and having some money aside in case it needs a repair, instead of spending everything on the vehicle and not having money to put gas in it.
Unless you don’t have money worries, which is hardly a student’s case, don’t go for a new vehicle.
The second you drive it off the store, it loses up to 40% of its value. This percentage will only increase the more you drive it. That’s why used cars cost half the original price.
If you’re new to driving, a used car is a better option. This isn’t the best time to buy a car that will cost you a fortune and learn the ropes in it.
Everything will cost more and the pain you’ll feel after each small dent – unbearable.
Speaking of math, you should also learn a bit about loan payments. Dealerships tend to boost the money payment figures when they find someone who doesn’t understand how this goes.
You don’t have to pay a premium price for a car and a higher interest rate. You can choose to pay lower rates at your ideal range.
3. Do Your Homework on Each Car
When you see a car that you like, don’t rush into buying it, not even if the offer sounds amazing. There are plenty of things to consider about a car before you buy it.
Do your homework before you invest your money. Rushing into it can cost you a lot shorter.
All this means that you’re searching for a car that has a solid bill of health. Cars that have been in accidents are no good, not to mention vehicles that have passed more miles than you can count.
The car might look good on the outside, but you’ll probably be saddled with expenses later on.
Pay great attention to the car you want to buy. Check its characteristics, the reputation of the dealer, learn a bit about the car, or hire someone to inspect it for you.
Everything from the motor to the trunk and the tires is important. Do your homework before you do your purchase.
4. Learn the Dealership Tricks
There are three things we can teach you about buying at dealerships:
- Don’t believe everything the seller tells you. No dealership wants to lose a customer. It is their job to sell a car and they usually get bonuses once they do, so they’ll probably try to twist things around or hide the details to convince you to make a purchase. Ask questions, but always validate their answers.
- Get your car on the last day of the month. This is when sellers and managers’ chances of getting a bonus are about to end, so they are much more likely to give you a big discount.
- Get into the dealership right before they close. People who work there will be anxious to leave work, so they’ll offer you better prices to reduce the purchase time.
5. Search for an Older Vehicle
When we say an older vehicle, we don’t mean one that’s been manufactured earlier. We mean one that’s been at the dealership for a longer period.
Look at their stock numbers and their stickers and find the pattern. You can see which ones have been there longer.
Vehicles that stay longer in a dealership lose their value fast. It costs them money to keep the vehicle on the lot, not to mention maintain it, put gas in it, advertise it, cleans it, etc.
Plus, they probably bought the vehicle to sell it at a higher price and as time passes, they lose money.
That’s the vehicle you want to buy. This is where you can ask for a bigger discount and save more money.
If you feel like you don’t have enough money to purchase a car, take some time to do your math and see if this is possible.
The tricks above should help you get a car on your budget, but you must take your time and not rush into making this important purchase.
Buying your first car is exhilarating and fulfilling, but at the same time, it requires a great deal of responsibility. To avoid unnecessary expenses and find a good car that will take you places, use our tricks above.
About the author: Frank Thompson works as a financial advisor online. He offers his services to anyone who needs them, as well as guides people into saving and organizing their budget by posting insightful articles online. In his articles and websites, you’ll find plenty of good information that will help you make smarter purchases and save more money.
Lucy Lee says
I am a university student and I have been thinking of buying a car. Thanks for sharing these wise tips, I now have a vivid idea of how I will finally realize the dream of buying my own car after all. Thanks again!
I basically did the opposite of everything listed here for my first car: no homework, it was really old, I believed what the seller told me and had crazy unrealistic expectations. It worked out like you’d expect; it was scrapped for parts about a year later.
Great post, hopefully people take note.