Got Wheels? 8 Tips for Finding an Affordable Car

(This is a guest article by Ryan Embly*)

buy carGraduates fresh out of college often struggle to stay afloat in a sea of college debt and student loans. Unfortunately, the bills never seem to end. Many college students live on campus and are able to get around without needing a car, but transportation becomes much more difficult once you have graduated and are looking for a job in a wide variety of locations. A car is something that can be very helpful for some recent grads or an absolute necessity for others. Cars can be expensive, but if you are careful and thoughtful there are lots of ways to save money and get a great deal. Here are some tips on how recent grads can find an affordable car and stay away from expensive pitfalls along the way.

1. Before you even start looking at cars, take a look at your budget. It’s easier to shop for a car if you already know ahead of time how much you are willing to spend. When you go to a car dealership, do not let them show you any cars out of your budget or the car lust will set in. Salespeople constantly try to upsell by offering unnecessary add ons like leather seats and satellite radio or by attempting to persuade you to upgrade to a more expensive and fancier model, but if you are committed to your budget you will be able to avoid these expensive traps.

2. Do your research. There are so many things you need to know about a car before deciding on a particular model. For example, does your dream car model have a nasty history of breaking down and requiring repeated maintenance? Does your car use up gas quickly or is it a fuel efficient dream come true? Is the car known for having a high safety rating? Search online and in consumer report magazines to find this information. If you aren’t careful with your car selection, you may end up paying what at first appears to be a great and affordable price - but in the end you find out that you get what you pay for after you’ve taken the car into the shop for the fifth time in as many months.

3. Leasing a car is not a good option for recent grads. At first, leasing looks attractive because the monthly payments may be lower, but in the long run all you are doing is pouring money into something that you can never stop paying for. Most cars will last for several years, long after you have finished off paying for it, making it a better long term investment.

4. Do not buy a new car fresh off the lot because new cars tend to rapidly depreciate in value. A one to two year old used car, on the other hand, has already depreciated and will be available for a much lower price. Just because a car isn’t the latest model doesn’t mean it isn’t any good – although car companies like to brag about their new and improved models, sometimes there isn’t much of a difference between last year’s model and this year’s model.

5. Check out different dealerships before settling on one. Although some dealerships may be selling the exact same cars, certain dealerships may have special offers that make it more worthwhile to buy a car for them. For example, a dealership may have a special discount for college grads or offer a particularly sweet interest rate.

6. Also make sure to shop around for good financing – don’t just take the first offer you get. If you are not sure what a good financing package looks like, go to a credit union or bank, tell them what car you want to buy and ask them what they’re willing to offer. Then take this offer back to the dealerships and start haggling. Do not be afraid to bargain – this is a common practice when buying cars.

7. Before you finish bargaining and sign the contract, make sure to read the small print to see exactly what you are agreeing to. Always ask questions if there is something in your contract you don’t understand. If you don’t take these precautions, your once affordable car may turn out to be more expensive than you thought because there was a pricey little clause hidden in the middle of legalese on the second page. Most dealerships are honest, but once in a while someone always tries to pull a fast one in the small print, and once you’ve signed, you’re screwed.

8. Even if you are able to purchase a car for an affordable price, don’t forget about obtaining equally affordable insurance. Shop for insurance the same way you shopped for dealerships and financing – call around and see who has the best price. Insurance prices depend on a variety of factors such as the model and year of the car you’ve purchased, your prior history of accidents and your grades. Some cars cost more to insure because they have a history of maintenance problems or are more likely to be stolen than other cars, so make sure to check up on this when doing preliminary car buying research. The best investment you can make for buying a car is to be a good driver and either have no accidents or very minor ones on your record. Also, keeping your grades up is really helpful since many insurance companies have good student discounts for academically successful individuals.

*About the author: This post was provided by Ryan Embly from the website Car Rental Express – a provider of cheap car rentals in North America and Europe.

*Image Credit: Photograph by jeff_golden [via Flickr Creative Commons]

If you like this article, you can bookmark it or subscribe to the feed.

1 Comment:

Washington Savings Bank said...

Great advice. Many new graduates get caught up in the idea of buying their dream car, but that is not always the best decision from a financial standpoint. Talk to your bank to get some advice and insight onto what the best financing package would be for you.