Still, funds are tight, therefore his choices are limited to older cars, some that may need repairs. Without the mechanical background to take care of a car, he’ll need one that is dependable, something all the more challenging when an affordable used car is pushing 10 years old. My advice to him is something I would share with all college-bound students, tips for you to follow if you’re in the market for a used car.
1. Know the market
— In recent years, the used car market has gone crazy, with late model cars costing a mint and even older, fuel-efficient cars commanding high prices. Gone are the days when you could find a bargain for about $2,000. Many small cars in very good condition and about five years old will cost north of $7,000, a price that may be out of reach for some families. One sign of relief is that as gas prices drop, values for older compact cars should fall too. Visit Kelley Blue Book for estimated prices on used cars in your area.
2. Set a realistic budget
— Based on the type of car you want, its condition and the information you gleaned from KBB, you’re ready to set a budget based on what you realistically can afford. And this is where many families have to come to terms with what is attainable for them. If your off-to-college student needs transportation, you’ll want to find a vehicle that meets his needs as well as his ability to maintain it. If your student doesn’t have the funds to afford a certain vehicle, you as parents may need to make up the difference. Otherwise, you could send her off to college in a car that is more of a problem than what it is worth, a vehicle that may not get her from Point A to Point B without breaking down. While setting up a realistic budget, it is also important to factor in additional costs of owning a vehicle such as registration and automobile insurance.
3. Obtain its service history
— The digital age has made tracking vehicle repairs a possibility, something that you can uncover by ordering a vehicle service report from a provider such as CarFax. As of this writing, one report will cost you $34.99, but unlimited reports for 30 days will cost you $49.99. Go with the latter as you’ll be looking at more than one vehicle. Keep in mind that not every repair may not show up, but it should give you a reasonable idea if a vehicle has been maintained and the maintenance involved in keeping it roadworthy.
4. Take it to your mechanic
— Use your Carfax report as a way to eliminate problem vehicles. Still, you’ll want to take a car that you like to a mechanic who can inspect it for a fee. Have the mechanic inspect each of the major parts carefully and ask him about repairs you can expect to make over the next several months to a year. Don’t be automatically turned off by a nasty noise such as a shriek coming from underneath the hood. A belt may be ready to go, an easy item to replace before you head off to college.
5. Finance at last resort
— You’re already facing four years of tuition, room and board, and related expenses, do you want a car payment on top of this? Avoid financing a used car purchase if possible, paying cash for what you can afford. Loans on used cars are typically much higher than equivalent loans for new cars. A parent’s excellent credit rating can yield a lower rate, with Bankrate showing 48-month used car loans for under 5 percent as of this writing. Exhaust all other options first before taking on additional debt — perhaps lending a family car for a semester until your financial picture improves is one option.
6. Get emergency roadside service coverage
— Auto clubs such as AAA are popular for an important reason: if you’re stranded, a tow truck can be dispatched to help you out. You’ll pay an annual fee for this service and as long as you don’t abuse it, your membership will stay active. A car may be in excellent condition, but if you lock your keys inside, then roadside service coverage is worth your investment.
Final Thoughts
You don’t want to rush into any car purchase, so do your research. Above all, take your time to ensure that you find the right vehicle at a price that you can afford. Maintenance, fuel, registration and taxes are just some of the expenses you’ll also have to pay besides the purchase price.
See Also — You Can Buy a Used Car for a College Student
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