Buying Your First Car: A Guide for College Students
The college experience is full of learning ventures that teach students how to be independent. This newfound independence can be full of decisions and purchases they have never made before, including purchasing a car. Purchasing your first car on your own is a huge and exciting milestone, especially for college students as they are balancing their academics, social life and their newfound independence. This guide highlights some ways your student can buy and manage their first car purchase and what pitfalls they should avoid.
Preparing to Buy a Car
Before visiting a car lot or dealership, students must organize their finances and conduct some research to understand what priorities they should look for in a car, which will give them a realistic idea of what they can comfortably afford. Another part of preparing to buy a car is understanding that the true cost of owning a vehicle is more than just the price of the car itself. It also includes insurance, fuel, registration, and maintenance. You may also need to have a conversation with your students to determine whether you might provide some funding to assist them. Understanding personal budgets and finances will be needed as your student weighs the pros and cons of monthly payments or paying for a car in cash. A car loan can be beneficial as less money is owed upfront, but these monthly payments, with interest, may continue for a few years. Paying for a car in cash comes with fewer strings attached but may be difficult on a student budget.
Choosing a Car
Model, make, year and whether your student wants a new or used car are all important factors to consider. Some cars may have higher regularly scheduled maintenance than others which can create ongoing care requirements for several years. Identifying wants versus needs is essential for students to get the most utility out of their cars. The easiest way to keep the price from creeping up is to make a list identifying the features they require, such as four-wheel drive for winter weather, and then add on nice-to-have features that fall within your student’s budget. Once your student knows what they want in a vehicle, using online tools or directories can help them research models that fit their needs, sellers in their area, safety ratings, awards and certifications or contact information.
Test Driving the Car and Making the Deal
Inspecting and test driving a vehicle before your student buys is important, especially if they’re buying used. Many first-time car buyers find their evaluation leads to higher satisfaction after their purchase because seeing and driving the vehicle increases their confidence in their decision. The viewing and test-driving process will alert your students to any needed maintenance and assure them that the car is the right fit for their needs. Your student can, and should, request a vehicle history report for used vehicles that will tell them previous owners, odometer readings, open recalls and damage and previous accidents and repairs. This compiled history report, from a company like Carfax, will give your student a full picture of the wear and tear of a car before buying it. Once your student has secured a loan or other financing option, it’s time to finalize the deal with the seller!
Additional Resources
There are several programs designed to help college students with big life milestones, including buying their first car. Some special deals and resources for students may include:
- Car Insurance Deals for Students: Several large insurance companies, like Geico and Allstate, offer student car insurance with cheaper monthly rate policies to make them more accessible for students buying their first car.
- Defensive Driving Discounts: Some car insurance companies offer discounts to those who take defensive driving classes, offering an easy discount on their insurance.
- Road Safety Scholarships: There are scholarships for college students who can demonstrate road safety skills. While these scholarships can’t be applied to the price of a car, they can help pay for school-related expenses, which can free up more funds for a car purchase. Taking a defensive driving class could give students a competitive edge on a road safety scholarship application.
Buying a car is a significant step toward financial independence. For many students,
it could be their first time applying for a loan and/or managing a large monthly payment.
The car-buying experience helps prepare your students for other financial obligations
in adulthood, both the work that goes into them and the reward.
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