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As a student, you may be strapped for cash, but in need of transportation. Here is a quick guide to getting a good deal on a used car so that you can make a safe and affordable purchase.
Check out your financing options
If you have enough money in savings, you can purchase your car in cash and avoid making payments each month to a lender. This can also save you money because you won’t be paying interest on a loan. If you have enough in savings, it can be a prudent decision to be sure that the purchase of a used car doesn’t completely clean you out. To be safe, you might want to be sure that you have some extra money in your account in case of an emergency.
If you don’t have enough money in savings to buy a used car in cash, you will probably need to get a loan. One of the challenges associated with getting loans and credit is that you have to have a good track record to get the good deals. If you are a student, you probably don’t have an extensive credit history which means that you might not get the most competitive rates available. On the other hand, getting a loan for a car and managing your payments well can be a weighty item on your credit report that encourages a good credit score.
Talk to different lenders about their loan products and interest rates. You might also want to have a serious discussion with your parents about co-signing a loan. Regardless of what you decide, be sure that you shop around for the lowest interest rates and best terms. Also be sure that you can manage your monthly payments while you are in school so that you don’t end up making late payments or defaulting.
Shop around for the safest and most affordable car
This means doing some investigating in many areas. It is a good idea to get some automotive magazines and consumer satisfaction publications so that you can determine which cars will be the most affordable to buy and maintain.
Once you decide what kind of used car you are interested in buying, comparison shop for asking price, mileage and features. You can use the information that you find to determine what you think is a fair price, and when the time comes, as leverage for negotiating price with the seller or dealership.
Inspect the car
This means being sure that everything meets your standards on both the inside and the outside of the car. You will also need to take the car for a test drive, have it checked out by a mechanic and research the vehicle’s history with CARFAX. Being thorough can save you money on future repairs, help you negotiate price with the seller and keep you from buying an unsafe vehicle. Be sure that you take your time with your research and investigation so that you make a smart decision about the used car you buy.
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Published on November 14, 2006