How to Afford a Car in College: 11 Useful Car Buying Tips

Having a car in college can provide convenience and opportunities to travel like no other.

Unfortunately, it comes with a financial burden enough to make buying an automobile daunting for a lot of students.

Many undergraduates find going to college costly enough and owning a vehicle could easily cause them to break down mentally when those monthly bills arrive.

The good news is there are ways to make having an affordable car in college doable.

Save Up

Here’s a general rule of thumb when saving up for a car:

You should aim for 20% of the price tag.

Suppose you are interested in an automobile costing $40,000. Then, you should have at least $8,000 in your savings account before you head to the dealership to purchase your dream car.

Luckily, it’s never too early to set aside money for a vehicle in college.

Whether still in the 9th grade or already a senior high schooler, do everything you can to save.

You can have a part-time job and allocate a huge chunk of it for your transportation.

Or do your best to avoid spending any of your birthday money or holiday cash gifts.

part time job

Apply for “Scholarship” Programs

No, I’m not talking about filling out the FAFSA form to get federal, state, or institutional aid.

Some non-profit organizations and foundations help make it easier for college students to own a vehicle — you just have to find one whose eligibility requirements you meet.

An example is Vehicles for Change, giving away donated cars for free or at a discounted rate.

Another is Good News Garage, which offers programs exclusive to college students to allow them access to affordable, comfortable, and dependable modes of transportation.

In most instances, you must demonstrate financial need to be eligible.

Consider a Used Car

A used car is substantially cheaper than a brand-new car.

It’s not just a low down payment that can work to your advantage by opting for a used one — you can also enjoy low monthly payments and insurance rates.

Don’t feel too embarrassed to be seen driving around driving a used automobile.

You’re not alone — up to 79% of college students drive used cars!

However, it’s also a must to carefully weigh the pros and cons of used wheels before settling on one.

For instance, while a used car is cheaper, it could have hidden problems requiring steep repair and maintenance costs.

Hop From One Dealership to the Next

Don’t buy the first affordable wheels you spot at the first car dealership you visit.

Take the time to visit different ones before you say “deal!”

Almost 40% of future automobile buyers plan to visit not less than three car dealerships, although it’s worth pointing out, too, that only nearly 30% of recent car owners shopped around that many times.

Of course, you want to test drive as many cars as you can to find the one that feels right.

Indeed, you also want to come across the best offer.

car dealership

Negotiate and Negotiate More

Can you negotiate on the price of a car?

Lending experts say you can and you should!

However, they also have some advice you might want to keep in mind when shopping around.

First, look into the vehicle’s fair market value and out-the-door price to have an idea of how much room you have to make a bargain fair enough for you and the vendor.

Second, negotiate one thing at a time — you should prioritize settling on the lowest price possible.

Lastly, don’t be afraid to walk away if you are still uncomfortable with the last price.

Shop Near the End of the Year

How to afford a car in college is a sensible question.

Here’s an equally sensible question, especially for undergraduates who want affordable vehicles:

When should a college student on a budget buy a car?

The best time for any budget-conscious car shopper to purchase an automobile is toward the end of the calendar year — September, October, November, and especially December!

Auto salespeople just want to meet their quotas before the new year to get hefty bonuses.

Similarly, older models need to be pushed out of the way to make room for newer ones the following year.

Improve Your Credit Score

Things like the model, color, and special features are all important considerations.

In buying a car in college, it’s also crucial that you take your credit score into account, too.

According to Bankrate, a good credit score (typically 680 or above) can help guarantee a car buyer like you lower down payment, monthly payments, and interest rates.

Alas, the average credit score for college-age individuals is 563, which is poor credit.

Before shopping for a car, try to improve your credit score.

You can do so by paying your bills on time, paying down balances, limiting the number of times you apply for new credit, and maintaining a credit limit balance of less than 30%.

Check out the next tip if all else fails.

credit score

Consider a Co-Signer

Still have bad credit after doing everything you can and it’s in the way of you owning a new car?

Grab a parent, family member, or friend to be a co-signer!

Simply put, a co-signer is someone who provides information like income and credit record as well as pledges to pay back the loan in case you are unable to do so as agreed upon.

With a co-signer in tow, you could get a vehicle with zero downpayment and even low-interest rates.

Unfortunately, there are a few downsides to keep in mind, too.

For instance, the co-signer of your choosing could feel that he or she has a right to the automobile or start to resent you if you are unable to pay the car loan.

Find Student Discounts

Your high school GPA is your key to getting into selective colleges.

Did you know your grade might also grant you access to an affordable car?

Look for lenders offering car loans or financing options with low-interest rates designed for students with good grades.

Some car manufacturers also offer discounted prices for first-time college-level car buyers.

Stay on Your Parent’s Policy

Many insurance experts confirm that the best way for college students to save money on auto insurance is to stay on their parent’s policy, which can let them save anywhere from 60% to 70% on car insurance costs.

The easiest way to go about this?

Unfortunately, by living in your parent’s home.

Some insurers will allow you to stay on your parent’s insurance policy even if you live on campus — you just have to list your parent’s address as your primary residence.

The key is to look for auto insurance companies that are cool with this setup.

Consider Leasing a Car

Have you looked into leasing an automobile instead of buying it?

A leased vehicle is not your own, although you can drive it for a certain length of time — the average lease is anywhere from 24 months to 36 months, but a longer one is possible.

Lease payments are substantially lower compared to monthly payments for a new car,

You also don’t have to worry about repair or maintenance costs, as most of them are covered.

In addition, you could drive a new car every couple of years or so!


Read Also: How Many Miles is Too Much for a Used Car College Student?

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily represent those of the College Reality Check.

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