Boston is home to many colleges and universities, and students often need their own rides to get to school. Owning a car is not easy, particularly for individuals who cannot devote themselves to a full-time job. With transportation comes high cost, especially if the vehicle was financed. Thankfully, a student car loan need not be a burden for college students. If you are in college and you need to finance a car, listen up: there are ways you can reduce your auto loan expenses. If you are wondering what these are, check them below.
Pick the right car
Your car expenses greatly depend on your choice of vehicle. As a student, all you need is reliable transportation, so do away with the bells and whistles. Choose one from the small and economical selection of cars. They are not only cheaper to finance, but also less expensive to insure. Research about such cars, and make sure to check the feedback of auto experts and customers alike.
Start building credit
If you have no credit history, start building yours as soon as possible. Paying off a car is a great way to build credit, but it will be better if you have already established credit prior to buying a car. Credit is the main consideration of lenders when granting loans. You may be able to secure an auto loan even without credit, but it will cost you more. If your goal is to buy a car and keep costs low, build credit.
How do you build credit? Train yourself how to use a real credit card by getting a secured card or retail card. Use it to pay small purchases, and pay off the balances in full on time. After a year or so of using your ‘trainer’ card, apply for the real thing.
Take advantage of your school’s resources
It is possible you can attract some lender offers because of where you study. If you do, you are fortunate—such offers usually take into consideration the kind of financial situation you are in. Even if you don’t, you shouldn’t worry. You can still cut costs by utilizing the resources of your school, should there be any. Inquire about resources at your college or university that can help you find lenders that will help you secure auto financing that is right for you.
Save as much as you can for a down payment
One surefire way of reducing auto loan cost is by borrowing less. Borrowing less doesn’t only mean buying a cheaper car; it also means paying more deposit. You should save up for a generous down payment so you need not borrow as much money. If you don’t borrow much, you need not repay as much. Plus, a higher down payment is often rewarded with a better deal because it helps convince the lender you are a serious buyer. The ideal down payment is 20 percent of the purchase price, but you may put down an amount higher than this.
In order to afford a hefty down payment, you should find employment. Consider taking part-time jobs to save money for the car purchase. You are also encouraged to sell stuff. Sell items you no longer need or use. Every dollar is crucial in building your upfront payment.