Car Budget Tips for College Students

Feb 12, 2020 by

College life can be fun. It is a time to learn and experience life in totality while exercising youthful freedom. However, limited finances and increased demands that one lives on a tight budget.

Although as a college student you may not have much money to spend, it does not mean you can’t buy a dependable car. Being in college means greater freedom and pursuing brighter opportunities that come with more responsibilities such as paying rent, electricity bills, buying toiletries which can be a difficult responsibility to fulfill.

Perhaps, you are wondering how you can afford a car and get the best value for your money as you pay for your education. If you are a student who’s in the market looking for a reliable vehicle to get you to and from campus, here are some tips on how you acquire a car when in college.

  1. Consider your financing options

If you can pay cash for any car that you buy. If you can’t afford to pay cash at the present, you may be able to hold on buying a car until you have enough money. Financing a car means paying more money for it. The dealer will be more than happy to finance you because they can make arrangements that will assure them more profits from higher interest rates due to their dealer commissions. If you must finance, make sure what your options are.

However, there’s an even better way to finance a car than through a bank, which his family and relatives. They can sometimes provide low-interest rates or even interest-free loans especially if they know you are occupied with studies to come up with the cash on your own. They are probably going to be keen on giving you a loan if you set up a systematic way to pay them back. In some options such as car loans Australia may be your way out.

  1. Do your research

If you are in the market to buy your new car there’s a great deal to consider apart from color of that interior. Your total car-related expenses include; loan repayment, insurance and any savings for repairs which should not be more than 20% of your monthly budget. 

There’s a lot more to buying a car than paying the monthly bill. There’s gas, oil changes, new wiper fluid, tire replacement after every five years and with a fluctuating market, you should make allowances for hiking fuel costs in your budget. 

Lastly, will you be responsible for taxes? Registration fees? Insurance? Make sure you factor in all these during your research to be sure of your expectations.

  1. Know your budget

Cars do not come in cheap so you need to have a clear plan on how you will pay for that car, be it new or used. A college student may have saved for that car through part-time jobs or may consider taking a car loan. If you chose the latter you may need to have a plan on how you will repay the loan which is actually a debt. Students can easily apply for cheap car insurance packages which you can afford to pay for in installments alongside your monthly fixed expenses. Having a budget will also help you narrow down to the kind and brand of car that you want. The budget should also include all other fees that will come with owning a car such as registration, cost of servicing, insurance premiums among others.

  1. Why you need a car

This is important because it will help you decide on the kind of car you want so that it serves its purpose well. Do you want a car to move from one place to another, do you want a car for business or do you want a car for road trips? Know why you want a car and research on the best one to fit that purpose. This can also help you make up your mind on if, you really need a car or not because a car will bring with it added monthly expenses. So can you afford it?

  1. Monitor your spending

Another factor to consider that can make a significant impact on your budget especially as a college student is monitoring how you spend your money on a monthly basis. This will help you know whether you are in a position to acquire a car plus the additional expenses that come with it.

Conclusion

Bottom line is, do your research on every step you take to buy that car to make sure you have made the absolute best decision on each step. If done right as a college student, you will save money, time and end up with a wonderful vehicle. Make a lot of effort to keep things practical. This means that while working on a tight budget, avoid luxuries and go for what works best for you.

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