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How to Buy a Car on a Student Budget

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Filed under Automotive, Automotive Help, Editorial

Buying a new car is not something to be taken lightly as a car is an expensive purchase. Before choosing a car, it is good to take your time to make an informed decision. Maybe you are wondering if you can afford a car. You do not want to spend less money on your car and end up with a car with a short lifespan.

However, you may not be sure whether or not a new car is worth the price tag. The good news is that car ownership is not a niche topic. There are many best practices to pull from. In this article, we are going to mention those practices to help you choose a good car. These practices include the following:

1. Assess Your Expectations

Before buying a new car, look closely at your income and expenses. Create a comprehensive budget that has all of your fixed expenses (expenses that are the same every month) like rent, the phone bill, or the internet. Also, look at your variable expenses (expenses that change every month) such as utilities, groceries, or books for classes. Determine the amount of money you are left with after budgeting all of your expenses.

Doing so is very important as it will help you know the amount of money you have for a car payment and car insurance every month. If you realize that the number is not very high, it is okay. You have options. The number will give you a good idea of what you can afford.

Buying a new car is a bad idea as it will depreciate the second you drive it off the lot. In fact, a new car loses up to 40 percent of its value the moment you drive it off the lot. For instance, if you buy a car for £15,000, it will be worth about £9,000 the moment you drive it off the lot. You will pay the £9,000 price tag for the same car.

2. Take Your Needs into Account

Before buying a car, it is good to ask yourself what you will be using the car for. Do you like camping? Research on the best SUVs within your car budget. Do you want a commuter car to drive you to work and back or to school and back? If so, consider buying a small 4-door sedan. If you an art student and you would like to transport giant canvases? If so, a truck may be ideal for you.

Remember that no car is one-size-fits-all. It depends on your needs. So, consider your needs before buying a car. Even though this purchase does not have to be your be-all and end-all acquisition, you should consider you want list when making your decision. This is because of the fact that this is not something that you want to repeat every 18 months.

It is better to stretch a bit the things in a car that meet your needs than to regret after buying a car even before you have emptied your first tank of gas. If getting a car that has those things that satisfy you costs an extra 40 dollars every month, buy it and skip a few happy hours to make up for it.

3. Check Your Credit and Consider a Cosigner

In some cases, you may need auto financing to buy a car. This refers to a situation where the dealership gives you a car loan that will enable you to drive a car off the lot without paying in cash for the car. You are supposed to pay a certain amount on that car loan every month.

When financing anything, the terms of your loan depend on your credit score. A higher credit score is more favorable for your loan terms. You will have lower interest that can help you in the long run to pay less for a car. Take a look at First Car Finance for options. You can check your credit score free of charge in many places including Credit Karma.

If you are like many young people and don’t have a high credit score or you don’t have any score, it does not imply that there is a wrong thing you have done. What it means is that you do not have a history of payment on credit cards, mortgages, or loans. A bank sees a young person as a wildcard. They have no proof you will pay on time and assume the worst.

In most cases, a person who buys a car for the first time needs a cosigner who can be a friend or family member. A cosigner cosigns trusting you will pay down a loan on time. Otherwise, the credit sharks will come for them. If you can get a cosigner, you will also build up your credit through the loan and next time, you may not need a cosigner. Auto loans are among the best ways to build up credit as a young person. This saves you money on car payments, utility deposits, and things involving financing.

4. Do Your Homework

As a college student, you already know about this. Find out about the vehicle you want to buy from many sources and check the average cost to insure the car. Buying a car isn’t the same as what it used to be. Nowadays, you can buy a car online using many sites without having to haggle with a car salesperson on a car lot.

This can make the process easier as you will avoid the pressure associated with an in-person negotiation which makes it more difficult. You should do extensive research to make an informed decision so that you can buy a good car that will last for a long period of time. Here are some of the things to consider when choosing a make and model:

-The car’s MPG. Determine the cost of gas in the long run. This MPG calculator will help you find a car’s MPG.

-How often the car requires part replacements and routine repairs. Are the repairs costly?

-The cost of auto insurance

-Whether the car suits where you will be driving it

-Whether there have been any recalls on the car you want to buy

-The resale value of the car at a certain mileage point

When you get your dream car, tell the seller that you are ready to buy the car. Have an independent mechanic check the car’s condition and ensure that the car has a clean title and no liens (outstanding debts). What this means is that you are looking for a car that has not been involved in an accident before and has a clean bill of health to avoid facing huge bills later on in case parts start failing or debt collectors come.

5. Ride into The Sunset

Once the car sale goes through, you can enjoy the benefits of owning a car. Buying a car is one of the best ways to start building solid credit, expand your opportunities and increase your mobility. With a car, you can drive where you want and when you want to do so. Ensure that you take the purchase seriously as it is an investment and a responsibility and a way to listen to your favorite music while driving to and from campus.

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