Buying or leasing a car has it pros and cons and is a big deal for a college student. With the economic downfall over the past few years and a tough job market, students need to be cautious when it comes to purchasing a vehicle. If you want a car, it is very important to know how much you can afford, the fees that will go along with your purchase, and many other things. Although it may be tempting to get a car to show off to your friends, you should establish a budget that will fit you and your lifestyle before making such a big purchase. Giving yourself a budget and sticking to it will make things easier for you financially. A realistic budget will be easier to maintain and will keep you from having financial dilemmas.
When it comes to leasing, one downfall is that you will have an annual mileage limit, and if you go over the limit, you will have to pay a fee. Additionally, if you decide to buy the car that you had previously leased, all the lease payments you made will not count towards the purchase, so you will have make the entire purchase from the beginning. The good thing about leasing is that it is a flexible agreement, which is especially useful for students who are not looking for a long-term commitment. Leasing a car usually involves smaller payments every month than buying one, which is why a lot of students look into it. This is especially beneficial if you are still not sure about which car you want to buy. Furthermore, if you lease a new car under warranty, you can save yourself the trouble of having to worry about repairing a used car.
Some disadvantages of buying a car are that the value depreciates as soon as the car is used and that you will have to pay extra if you want longer, more thorough warranty coverage. Buying a car also means you will be responsible for any repairs that the car needs as well its maintenance. The pros of buying a car include the fact that you will likely be using it for a long time, and when you’ve finished paying it off, you can save the money you were previously using to make car payments. You can also drive and use your car as often as you want without worrying about the extra fees you would have to pay if the car were leased. Owning a car also means you can sell it if you decide to get a new one or you need some quick cash.
The most important thing to remember about buying or leasing a car
is that you really have to understand how much you are willing to spend and how much you can afford in car/lease payments as well as maintenance fees. To get a better idea of the interest rate you can expect on your car/lease payments, take a look at your credit report and score
. If your score is high and your report doesn’t contain many (or any) negative marks, you can expect a reasonable rate. If not, you may want to work on raising your score a bit before making the purchase. If you think you are financially stable enough to make the monthly payments for a car, then go for it. Be sure to take your time when looking for a car and examine all possible options so don’t miss out on a good deal or make a costly mistake. Practicality is valued a lot today, so you should focus on the quality, safety features, and drivability of the car you want.