Anyone can buy a car, but it takes planning to buy a car that gives you everything you want without putting too much strain on your budget.
So before you even set step on the car lot or into the dealership showroom, make sure you’re armed with all the info you need to get the best deal on the right car for you.
Here are some pointers to get you started.
Buy used. Did you know that the second you drive a new car off the lot, it instantly depreciates by about 20%? Think about whether the extra money you’d put into a new car is worth it to you. You could buy that same car used with maybe a few thousand more miles on it, and keep a few thousand dollars in your pocket instead.
Decide what you want to spend each month, which isn’t necessarily the same as what you can afford, and then use that to find what your price tag limit is. Here’s a quick guide: A $20,000 car at 8% interest lands you payments of about $440 a month. Adjust up or down from there, or use the car payment calculator at Edmunds.com to see what your car loan might cost you each month. You might be able to afford a larger car payment, but think about what you could do with the money you’d save with a lower one.
Line up financing beforehand. If your credit’s good, you can often get a better deal from your bank or credit union than from the dealership. Shop around to get the best terms. About.com offers some good pointers on car loans for college students and a list of student-friendly auto financing companies where you can get the money you need.
Figure out what you want. Make a list of must-haves. Are you looking for a pickup or a compact? What kind of mileage do you want to get? Do you want a hybrid? Leather seats or side-curtain airbags? An auxiliary jack for your iPod?
Do your homework. Once you know what you’re looking for in a car, start doing your research. Find which cars fit your wish list of features; the Edmunds.com Top 10 Lists are a great place to start. Read up on each car to see what kind of history it has as far as performance and reliability, and cross off the ones that get bad reviews. You may want to pick up a copy of Consumer Reports Used Car Buying Guide. You can also check out the reviews and road tests on sites like CarMax and Car and Driver.
5 Smart Buys to Consider
If you’re looking for ideas, take a look at these under-$20K cars that score high with the twenty-something crowd and deliver solid safety, reliability, and value for your dollar.
Scion TC
New: $17,620 MSRP
The Scion comes loaded with a 2.4 DOHC engine, panoramic moon roof, roomy interior, and a sexy sports car look. It scores excellent safety ratings and made Forbes’ list of Best Cars for College Students.
Dodge Caliber
New: $14,560 MSRP
Great safety and reliability ratings, and CarMax has it on their list of Top Cars for College Students.
Jeep Compass
New: $17,035 MSRP
Besides boasting a sleek, contemporary design and decent fuel economy, the Compass comes standard with stability control, side curtain airbags, and all-wheel drive. And you have your option of adding the booming sound system with outward-facing tailgate sound speakers. Another Forbes top pick for college students.
Honda Fit
New: $13,950 MSRP
Stylish good looks, anti-lock brakes and side airbags are standard with the Fit. Smaller than the Civic, but still roomy for its size, it gets great gas mileage, and options include an automatic transmission with paddle shifters on the steering wheel. One of a handful of cars to make the CNN Money 2006 Best Cars for College Kids list.
Toyota Corolla CE
New: $14,405 MSRP
Consistently having earned top scores in all categories from Consumer Reports and 4.5 out of 5 stars from J.D. Power in overall quality, the Corolla is one of the most reliable, trouble-free cars you can get and a Consumer Reports Best Bet.