Congratulations, you did it! You made it through those long lectures, fall tailgates, and study-filled nights fueled by endless cups of coffee. Now that you’ve walked across the stage and received your diploma, it’s time to put your college lifestyle behind you and enter the real world.
One of the first steps to adulting is buying your first car. Unless you’re living in a major metropolis such as New York City or San Francisco, you’ll most likely need a reliable vehicle to get you to and from your new entry-level job.
Before you go out and jump the gun, there are a few things you should know when it comes to buying your first car post-college. To avoid digging yourself deeper into debt (thank you student loans!), take a look at our tips on buying your first car after college below.
Do Your Research
Buying a car is a rite of passage for all new college grads. The early 2000 model of your high school car is probably on its last legs and making a variety of noises you know nothing about. If you want to show people you have your life somewhat figured out, it’s time to trade in your old car for something a bit more modern. The first step, similar to the first step of your senior thesis, is to begin by conducting research. You don’t want to buy the first car you see, as it can end up being a lemon. Instead, you want to research different brands, makes, and models, as well as dealerships, to find a car that matches your lifestyle.
To start the research process, look up all the local car dealers near you, whether you are deciding between leasing or buying at the Audi dealership near Spokane Valley or taking a preliminary test drive at a Honda dealership near Seattle. Once you have a list of all your local dealers, compare their prices of potential models you’re interested in. You can even call them to get more information about their finances and trade-in options.
Create a Budget
Another important action to take when buying your first car is to create a budget. The last thing you want is to fall in love with a car and realize the sticker price is more than you can afford. By setting a budget, you’ll be able to narrow down your options and have realistic expectations. There are numerous personal finance apps that will keep track of your spending and encourage you to save more money, as well as financial resources for recent graduates that can help you get on your feet.
Navigating the waters of adulthood is pretty expensive. By saving money, cutting back on meaningless spending, and creating a budget, you’ll be able to afford a great first car post-graduation so you can get from point A to point B in style.
Decide Between New vs. Used
Another major option to consider is deciding whether you want to buy a new car or used car. A new car, decked out with the latest safety features and entertainment systems, will last longer, have newer safety features, and provide a more entertaining ride. However, this option will come with a more expensive price tag, which may not be viable considering most college grads have hefty student loan payments to make.
On the other hand, used cars are much cheaper, but may have outdated safety features, wear and tear, and a shorter lifespan. However, a potential compromise is opting for a certified pre-owned vehicle (CPO). A CPO vehicle is a used car where dealers use manufacturer-specific parts and tools to restore the car to mint condition. With a CPO car from a dealership, you can rest assured knowing you’ll have a dependable ride that’s more affordable.
Decide Between Lease vs. Buy
Another financial decision you’ll need to make is whether you want to lease or buy your car. If you’re looking to buy a car, you can take out an auto loan to help cover the expenses, and make recurring monthly payments until you pay the car off. While more expensive, once you’ve completed your auto loan payments, the vehicle will be all yours.
However, leasing is another popular option where you make recurring monthly payments as well. But, unlike buying a car, leasing is more like renting an apartment. Leases typically last between 2-4 years, and once your lease is up, you return the vehicle. At the end of your contract, you may be able to buy the vehicle, or you can trade in for a newer model. While both options have their benefits and drawbacks, it’s important to do your research and set a budget to see which option makes the most sense for your situation.
Negotiate a Fair Price
The last step to take when buying a car is negotiating a fair price. Once you’ve found a dealership and a model you want to buy, the dealer will sit you down in their financing center and go over the cost, fees, and additional information on purchasing your car. This is when you need to put your negotiating hat on and show them you’re there to get the best deal possible. There are a few negotiation apps available for mobile phones you can take advantage of to hone in on your negotiating skills.
Remember, your biggest strength is simply walking away. A dealer never wants to spend their precious time, only to have a sale fall short. If you’re not happy with the terms and conditions, saying no and walking away may entice the dealer to hunt you down and lower the price.
Key Takeaways on Buying Your First Car After College
Now that you know the important steps to take when buying your first car after college, it’s time to do your research, save money and set a budget, and negotiate on a price that works for you. With these tips in mind, you’ll be behind the wheel of a brand-new ride that will show you that adulting isn’t so bad after all.
For more great tips on all things college, check out the other blogs on College Basics.