When you were in college, you may not have needed a car, especially if you lived on campus or had easy access to public transportation. However, once you graduate, you may be working full-time and need a car to commute. But before going to the dealer to choose your dream vehicle, it’s important to review a few tips that can help you save money during the car buying process.
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Know Your Budget
When you have a full-time income, figure out an overall budget based on your income after taxes. Don’t forget to factor in other expenses when figuring out how much you can spend on a car. You’ll also want to figure out housing, clothing, and food. If you are like many recent grads, you will likely have student loan repayments as well, so don’t forget to factor these into your monthly expenses. However, refinancing your student loans can make your repayments more manageable. When you refinance student loans, you can get a new loan to pay back the old ones, and this can significantly lower your monthly expenses.
Put Your Newly Learned Research Skills to Work
It is nearly impossible to not make a mistake when buying a car, especially if you have never bought one before. The internet can be a huge help in the process, but it can also make things more challenging if you don’t know how to research right. There are many government and third-party websites that offer information like car reviews and comparisons on fuel economy.
You should avoid spending too much time on online chat rooms or forums when researching a specific model. The information is not from a verifiable, third-party source. There are both positive and negative things about every car model, so it is best to stick to information you know is accurate.
Be Careful of the Dream Car
It may be tempting to just go for your dream car, especially if you landed a great job shortly after college. But this is an important time to be saving, and your first car should serve only the most practical purposes. It should be able to get you to and from work, and it should get you to and from your family and friends’ homes. Hold off on the dream car until you have a bit more in savings.
Consider Leasing
While leasing is not an option for everyone, it works for some people and can help them save money. If you are considering leasing, make sure you understand the mileage limits, terms, and conditions your lease contains. If this works for you, you can be able to get another vehicle in a few years when your needs might be different. The only expenses you will face will be routine maintenance and gas. Just make sure you lease from a reputable dealership instead of a third party.
Be Careful with Your Dealer
Getting a car after you graduate should be an exciting time in your life, but if you use the wrong dealership, they can ruin the experience. There are some good dealerships, but you must know what to look for. Know that information you find online could be manipulated or wrong. Checking out dealers on reputable websites can help you figure out which one to go with. Many sites offer buyer reviews from others in your area.
Save Money Where You Can
Many dealerships have incentives for recent grads, and they could range from a few hundred dollars to over $1,000. You may be able to save money through other factory incentives as well. You will likely need to prove you are a recent college graduate. To get a car loan to cover the rest of the costs, you will likely need to show proof of employment too. When getting a loan, you shouldn’t stretch it out indefinitely to make each payment lower. It’s a good idea to get a 60-month or less loan. Once you start stretching out the loan beyond that, at some point, you may still owe more than the car is worth because of depreciation. If you can’t make the monthly repayment with a 60-month loan, you might want to look at less expensive options or wait to purchase a vehicle.
