A graduate’s guide to buying a car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make smarter financial decisions by offering you interactive tools and financial calculators as well as publishing high-quality and impartial content. This allows users to conduct research and compare information for free and help you make sound financial decisions. Bankrate has agreements with issuers, including but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn money The products that appear on this website come from companies who pay us. This compensation may impact how and where products are displayed on the site, such as for instance, the sequence in which they be listed within the categories of listing in the event that they are not permitted by law for our mortgage, home equity and other home lending products. But this compensation does affect the content we publish or the reviews you see on this site. We do not include the universe of companies or financial offerings that might be open to you. kali9/Getty Images
4 min read Published September 16, 2022
Written by Allison Martin Written by Allison Martin’s work started over 10 years ago as a digital content strategist. She’s been published in several leading financial media outlets, such as The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and Credit.com. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances through providing concise, well-researched and well-written information that breaks down complicated topics into bite-sized pieces. The Bankrate promises
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Therefore, this compensation may influence the manner, place and when products are displayed within the listing categories, except where prohibited by law for our mortgage, home equity, and other home lending products. Other elements, such as our own rules for our website and whether or not a product is available within your region or within your personal credit score could also affect the way and place products are listed on this site. Although we try to offer a wide range offers, Bankrate does not include information about every financial or credit product or service. You’ll be walking across the stage soon to receive your diploma, and now it’s time to journey into the real world. The purchase of a car could be part of the plan if you’re planning to be living in a place where public transportation isn’t the most efficient method of travel. However, before heading to the dealer to pick out the perfect vehicle, conduct your own research and obtain preapproved and so that you can shop with confidence. Select the vehicle that is suitable for your lifestyle post-graduation The thought of purchasing your own vehicle is thrilling. But you should be careful not to becoming distracted. Or, you could choose a vehicle that is in line with your preferences however isn’t practical. Commute How long is your commute from and to work? If your commute is long, you may want focus your hunt down to vehicles with good performance in terms of fuel efficiency particularly in light of the current trend in gas prices. It’s currently around $3.70 per gallon for regular fuel according to AAA which is less than the last months average $3.96. However, this is much higher than the median price per gallon of $3.18 just one year earlier. Visit the and use its online tool to see the average annual fuel costs for any vehicles you are thinking about. It is possible to narrow down by year, year-old, and model, and then view recommendations for the most fuel-efficient automobiles. Dimensions and other features Are compact cars enough for you, or do you require something bigger, like an SUV or a pickup truck? What about features — are certain ones a “must-have” on your list? If you recently landed an employment with a high pay that will begin following graduation, you might have access to the latest technology and features. But, you may prefer smaller vehicle without all the hassles until you get started and establish your career. Safety features How safe is the car you’re thinking of buying? Request an official copy of the vehicle’s . It also contains maintenance records. It will reveal if the vehicle was involved in any collisions. It is a good reference. You can search safety ratings and search on recalls using the car’s make and model, or VIN. Choose between used and new There’s plenty to love about a new car. It’s clean, in great condition and smells great. However, there are some that are as reliable. Additionally, you can purchase an extended warranty for around $1500, and get security knowing that you’re safe in the case that you suffer a serious mechanical failure. Consider the following when deciding between a used and new car: New cars are covered by a manufacturer’s guarantee. This coverage could save you a lot of cash if your vehicle has a breakdown and requires major repairs during the initial couple of years after you purchase it. New cars often have all modern technology. However, you may find a slightly used car that has the features you desire. Some used cars can have low mileage. So, you shouldn’t have any mechanical problems for a long time. Maintenance costs will likely be lower , and you’ll be able to get a better price. Certain used vehicles are . They receive the manufacturer’s seal of acceptance after having been brought up to a standard mechanically , and come with a limited factory warranty. Consider the total cost of car ownership Beyond the monthly payment for fuel, as well as insurance premiums for autos and also take into repair and maintenance costs. In 2021, the median cost of maintenance, repairs and tires was around 9.55 center per mile, as reported by . However, the costs differ by vehicle, but you can use the calculator to estimate the amount you can expect to spend over time. Annual registration renewal expenses that typically vary from less than $20 to just over $200 per year, are important to consider. Some states assess a flat fee and others rely on the age of your car, its the efficiency of its fuel or weight to calculate registration fees. Research cars and get financed prior to visiting a dealer. Many dealerships provide in-house financing however it is better to do this before you start shopping for the car. You want to know what you can actually afford, and quotes from your credit union or bank will help you decide on a purchase price that works. Additionally, you’ll have more leverage . The deal won’t depend on the ability of you to obtain financing through the dealership, and you’ll be able to behave as the cash buyer. Understand the benefits of buying as opposed to. leasing There’s a lot of debate about which option is better. Here are some benefits of both options lease payments on more recent vehicles are generally less expensive. If you have your sights set on a particular vehicle that’s a bit expensive, you may be able to afford the monthly payments if you get a lease. There’s a manufacturer’s warranty in the event that you purchase a brand new vehicle. It usually covers you until 36,000 miles, or three years, so you won’t be required to spend an enormous amount on repairs should there is a mechanical problem that arises. There are no mileage restrictions for buying a vehicle. But if you decide to lease, you’ll be restricted to a range of 10,000 and 15,000 miles per year or risk racking up excessive mileage fees. They can cost you between 10 cents and 25 % of a mile or more depending on the terms of the lease agreement. You’ll own the car once the loan is fully paid. Lease agreements operate differently, but. The lease will require you to return the vehicle to the dealer when the lease expires unless you opt to . Next steps Ultimately, buying a car during college is among the biggest purchases you will make. To make sure that you are getting the best deal, you want to do the necessary research to locate an automobile that is compatible with your lifestyle and budget. It’s also important to obtain pre-approval for financing before you visit any dealerships and consider the advantages of purchasing and leasing to determine which is the best option. Find out more
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Written by Allison Martin’s work began over 10 years ago as a digital content strategist, and she’s since been featured in a variety of top financial publications such as The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and Credit.com. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are passionate about helping readers gain the confidence to control their finances by providing clear, well-researched details that cut otherwise complex subjects into bite-sized pieces.
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