It is overwhelming and exciting to buy your first car for students. It's easy to feel lost in the process if there are so many factors to consider. Setting a budget, researching different car models and exploring financial options can help you make an informed decision that can benefit you financially in the long run.
Set a Realistic Budget
Before you can even start looking at cars, you need to determine how much you can afford to spend. As a student you have very limited financial resources, so it is important to be realistic with how much you can spend. Factor in the total cost of ownership in your budget, not just the purchase price. This would include monthly payments, insurance costs, maintenance and fuel costs. It’s easy to ignore the additional costs for the original price tag, but doing so can lead to financial strain later on.
Explore Your Financing Options
To make an informed purchase, you need to investigate your financing options. If your savings are not deep enough to buy the car outright, you may need to explore financing options. Some students may qualify for car financing with CarMoney or other brokers and even through dealerships, but most will opt for personal loans. Always compare interest rates to see if they will fit your budget.
Research Car Models
Not all cars are created equally. It’s crucial to choose a model that meets your needs as well as suits your budget, especially as a student. Consider factors such as fuel efficiency, reliability of the car and the maintenance costs when selecting the car you want. A brand new car isn’t always a great deal. A pre-owned vehicle can offer the same benefits as a new car without the hefty price tag. Take your time to research different makes and models and by paying attention to reliability ratings and overall cost of owning a car.
Check Your Credit Score
Getting financing is often dependent on your credit score. If you have no credit history, securing a loan may be more challenging, but not impossible. Check your credit score and work on it if needed to apply for financing. If you have a limited credit history some dealerships and lenders may offer you special financing options. Shop around to see what the best possible deal is that could be offered to you.
Insurance Costs
Insurance is one of the most expensive ongoing costs of owning a vehicle. Insurance costs vary on the make and model of the car. Get quotes from multiple insurance brokers to get an idea of how much you will need to pay each month. Newer cars typically have higher insurance premiums. It is better to go for a more affordable, safe and reliable car so that you can save on insurance costs as a student.
Account for Maintenance and Repairs
Maintenance and repairs is another cost that is often forgotten. Older cars are cheaper up front, but may need more repairs, which will add up in the long run. However, newer cars may come with warranties to cover some of the repair costs. Have a look at the recommended maintenance schedules for the cars you are interested in and factor in potential repair costs into your budget. Get a vehicle that is inexpensive to maintain.
Taxes and Fees
Taxes and extra ownership fees can significantly impact the total cost of ownership. Sales tax, title deed fees and registration costs can add on to the price tag of the car. Research the tax rates that are applicable to you where you live and add these costs to your budget. Registration renewals also need to be considered and any potential vehicle inspections or emission tests also need to be factored in.
Test Drive the Car
Now armed with narrowed down options, make sure to test drive the car before you buy it from a dealership. It is important to see if the car matches your driving style and your comfort preferences. If you are buying a second hand car, have a mechanic take a look at it to make sure there are no issues. If you do this, it can make you aware of any potential future problems the car might have and you can make sure you won’t regret your purchase down the line.
Making the Right Decision
It doesn’t need to be overwhelming buying a car. Make sure to do your research so that you can make a good decision.
