Crossing the stage to receive a handshake and your college diploma is an incredible moment, the culmination of years of hard work and intensive study. As you begin to think about the next stage in your life, many things require your attention — not the least of which is the development of your career. However, you’ll need a way to get around to all those job interviews, and now is the perfect time to start laying the groundwork for your financial future by building good credit, too. In other words, it might be the ideal moment to look into buying a car on your own. It’s a process, though — one you should know as much about as you can before you begin. To get started, here’s a helpful guide to the basics.
What Kind of Car Should You Buy?
New or used? That’s the biggest question most college grads have when they start thinking about buying a car after college. The appeal of a new car is hard to deny; it comes with a warranty that you can trust in to take care of any mechanical problems in the first few years, and it probably has all the latest bells and whistles, too. On the other hand, a used car may have higher maintenance costs, but your up-front investment is lower — and some low-mileage used cars might work well, too. So what should you pick?
Ultimately, this comes down to your personal financial situation. Looking at used cars under $10,000 is the smartest and safest way to lock in a low monthly payment, which may be especially important for those still on the job hunt. If you can afford a higher monthly payment for a newer car without impacting your long-term finances, it may work out better for you — but it’s worth asking if the depreciation will change your mind later.
How Much Should You Aim to Spend on a Car?
When buying a first car, it’s important to balance what you need and what you want. It’s impossible to name a specific price point for college grads, as everyone’s situation will be different, but what you should know is how much it will cost to keep the car running. Examine models that suit your tastes with an eye towards their known maintenance costs, and when looking at used cars, always ask for an inspection before buying. As a general rule, though, most will suggest that you keep your monthly payment at or below 10% of your income — otherwise, it could put you in a financial bind.
Developing and Sticking to Your Budget
To figure out your budget, you should look at both your finances, plus what it would take to purchase the type of car you like. In other words, look for the features that you want the most, then find vehicles that fit the bill. Whittle them down until you’ve reached a shortlist of suitable candidates. Try using a financing calculator to determine your monthly payment, then compare that number to your current income. Don’t forget to factor in costs that you’ll incur after purchasing the vehicle. Reach out to your preferred insurer for car insurance quotes using information about the vehicles you’re most likely to buy. Understand how much these monthly costs will add to your overall expenditure and plan your budget accordingly.
Exploring Options for Financing to Make the Process Easier
Having the right resource for financing your vehicle can make the entire process less stressful. Many choose to work through banks, while others look to credit unions such as Resource One for an easier way to finance a car. Not only that, but many credit unions can also point you in the right direction when it comes to the best place to buy used cars in the local area. Often, these dealers work regularly with the credit union, making it simple to pre-qualify and streamline the process. Why wait for days for loan paperwork to process when you can commit to the car of your collegiate dreams sooner after graduation?
Tap Into Resource One’s College Graduate Program for Cars Today
The freedom and flexibility that having your own vehicle afford are hard to put a price tag on; a car is an investment that brings value to your life in ways that go far beyond the vehicle itself. Whether you’re in a strong financial position and can afford a brand new car or you’re in the market for a dependable but affordable used vehicle, knowing what steps to take is essential for making smart decisions. Having a reliable resource for financial insight and college graduate car deals doesn’t hurt, either.
At Resource One Credit Union, we make it simple and straightforward for grads like you to explore loan options that match your credit history and income level. Let us help you get into the car you’ve had your eye on as you keep on driving towards the next milestones in your life. Stop by and see us in one of our convenient locations and ask about our programs for recent graduates.