For students getting a car can be a challenge with exams and assessments always looming around the corner finding a job that pays well enough to afford a car is no easy task. However, being a student is not without its perks. When you are a student, it is possible in some circumstances to have a bit better chances for getting approved for a loan since the expectations for a student loan are not as high as for any other person with regular income.
There are tips that can help you achieve the goal of acquiring a vehicle, and it is highly recommended that you follow these tips, since they are a way towards getting higher chances to get approved for a car loan. This means that you will be one step closer towards driving a vehicle around campus, and making your life a lot easier.
Do not think too big
Most student’s dream to drive a new BMW, Subaru WRX or some other flash car. Some students think that obtaining a loan will be an easy way to achieve that dream. Everything seems easy when you have to pay small amounts of money every month. However, this is not the case. You need to set certain limits to your car purchasing for a few reasons.
The first reason is that the chances to get approved are higher if you choose a cheaper vehicle. The maximum amount of money that you can borrow is determined by your monthly income and the period of time that you will have to pay the loan off. Typically most car financing institution will agree to a car loan that lasts no longer than seven years, so you are left with a choice of cars that are not as expensive as you might possibly like.
Another reason is that more expensive cars need a lot of petrol. With recent petrol prices, it is obvious that driving a car everyday is slowly, but surely, becoming a luxury. A new BMW or an expensive SUV, even if you do get approved for one of those, will consume a lot of petrol, which will, in turn, mean a lot more monthly expenses for you that you might not be able to cover. Going small in the beginning will save you a large amount of money that you can possibly later use to get a new expensive car, once you finish University.
Used cars over new cars
Being a student means that you cannot be sure when you are going to have a regular monthly income in the form of a paycheck. This means that your price range is quite limited for obtaining a car. To this end, it is very reasonable to choose some things that are less expensive. Used cars certain fall under that category.
“Why are used cars better?”, you might ask. The reason is simple. Cars depreciate quickly. If you purchase a used car that has already been a part of the lease agreement, or has been used for a few years, you can be sure that it will cost a lot less than a new car. Sure, you will have no warranty, but, if you choose a car that has been a part of the lease, you can be sure that it has been well maintained. It will serve you well for your few years around college and once you have a stable income, you can purchase a new car, and enjoy the pleasure.
Make a down payment
When you think about getting a car loan as a student, think carefully and plan ahead. See if you can save up some money during the summer holidays. Then use this money to make a down payment on your car loan. If you can do this, it will go a long way towards getting approved for your loan, as well as getting much better loan conditions. Making a down payment means that you will have to repay a lesser amount of money. Also, it may serve as a security for the car loan that you have taken, thus providing you with a lower interest rate, which mean everything when you are a student. Having to pay less each month for a car loan means more money to spend on whatever you like.