![]() On the flipside, you’ll have to spend on the pre-purchase inspection from an independent mechanic to identify any operating issues with the car. If the car is very old, it’ll be unlikely that any warranty is leftover, so you might be financially liable for any major repairs in the future. Used cars, if well inspected, are great options for financially strapped graduates. ![]() In terms of auto loans, you’ll likely save on interest as your total loan amount that you’re paying interest on will be lower. Since used cars are lower in cost, you can save on tax and insurance premiums. You can either budget a lot less for your vehicle or take your initial new-car budget and use it to buy a much fancier used model than you would have been otherwise able to. Thus, you will be able to save a substantial amount on the cost of your car. The biggest advantage to buying a used car is that the original owner will have absorbed the cost of depreciation that occurs in the first few years of ownership. Secondly, according to US News “It’s not unusual for a new car to lose 20 percent of its value the moment you drive it off the lot, so if you don’t pay at least 20 percent down, you’re liable to owe more to your lender than it is worth.” 2 What About Used Cars? Because its value is higher, you will pay more in sales tax as well in insurance. On the other hand, choosing a new vehicle means you pay much more than a comparable used model. They also come from the factory with warranty coverage for at least the first three years or 36,000 miles, whichever comes first. ![]() New cars boast improved fuel efficiency, often contributing to reduced fuel costs overall. You will also likely have all of the advanced safety features like autonomous emergency braking, adaptive cruise control, blind spot monitoring, and lane departure warning, which older used cars will probably lack. Are New Cars Worth It?īuying a new car means you can get the newest technology like Apple CarPlay and Bluetooth phone connectivity. Both options have their fair share of advantages and disadvantages. The first big decision you have to take is whether to buy a new or used car. Let’s explore some important financial considerations for buying a car, as well as some techniques recent graduates can use to prepare for the purchase. Yes, there’s a lot to consider, but luckily, there are lots of options out there as well. So what do you do? With a little planning and research, it’s definitely possible to qualify for an auto loan and get yourself a new ride without sliding into insurmountable levels of debt. The average new model costs in excess of $31,000, with even small sedans approaching the $20,000 mark when fitted with basic features. Today, in addition to their exorbitant student loans, graduates are sliding further into debt due to rising car prices. You want to drive to work in your own car rather than your parent’s old ride – but can you afford it? ![]() You’ve just graduated, with a crisp new diploma you’re ready to take on the world and are excited for your first day of work at your new “adult job”. Buying a Car When You Have Student Loan Debt
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