Buying a vehicle can be particularly stressful for a college student who might not know much about the topic. Keep these tips and techniques in mind before shopping for the car that may become necessary after graduation. 

Assess needs versus wants

Before buying a car, potential buyers should first decide if having they need one in daily life. 

Kathy Sweedler, consumer economics educator at the University of Illinois Extension, said an easy way to do this is by determining what your needs versus your wants.

“If you live in a real urban area where there’s good bus systems and things like that, you might not need a car,” Sweedler said.

Andrea Pellegrini, visiting assistant director at the University of Illinois Student Money Management Center, said students should ask themselves, “Do I actually need a car to get where I need to go, or do I just want one?”

Make a budget and track your expenses

By making a budget and tracking everyday expenses, students and recent grads can determine if they can afford a car.

“(Students) need to know what their expenses are and what their income is (to) make sure that they have a really good sense of where the money would come from to add in a monthly payment,” Sweedler said.

Sweedler said one way to see if you can afford car payments is to track your expenses for a month or two before buying a car.

Pellegrini said the hardest but most important part of budgeting is recording your expenses, but she said many resources can help potential buyers make a budget, including peer advisers at the Money Management Center.

“In this day in age there are so many tools available, it’s kind of a poor excuse not to track your spending,” Pellegrini said.

Check your credit report

Sweedler said that before students hit the bank and take out a loan, they should check their credit report. 

It is common for there to be mistakes in credit reports, which may affect the amount of a potential loan, she said. These mistakes could also change how much buyers will pay for the car in the long run, so it is important to look at the credit report as soon as possible. 

“If you find a mistake on your credit report, it could take a month or two to get it fixed,” Sweedler said.

Anyone can receive three free credit reports a year online at annualcreditreport.com, one from each of the three bureaus. Sweedler advises checking all three reports, as each contains different information regarding one’s credit. 

Shop around

Comparing prices at different locations can be worth the effort and could result in saving significant amounts of money. 

“There’s more than one dealer around,” Sweedler said. “(It’s) just like comparison shopping with anything else, but this is a big purchase so it’s worth your time for sure.”

Jay Yao, junior in Engineering, used the websites cars.com and autotrader.com to compare prices while shopping for a car last spring. These sites allow users to search for specific vehicles being sold near them, based on their inputted ZIP code. Yao suggested that students also use unconventional resources to search for a vehicle, for example, websites such as YouTube.

“There are a lot of car review channels on YouTube that could possibly help you decide which kind of car you want,” Yao said.

Sweedler said a good way of assessing whether buying, leasing or renting a car is right for you is to determine how long you are planning to keep the car. To get the best deal, she suggested checking consumer reports for car prices and comparing a car’s sticker price with its price at other locations. 

“I think you should do your homework first so that you kind of have an idea of what is a reasonable price,” Sweedler said. “For all things, the rule of thumb is, if it sounds too good to be true, it very well might be.”

In addition to shopping around for the best car price, Sweedler suggested also browsing for the best interest rate.

“Often you can get a loan where you buy the car, but that might not be the best rate,” she said. “What you’re really doing is you’re looking for a good interest rate. Sometimes people find that a credit union or their financial institution is better than the place where they sell the cars.”

Be informed

Students may get overwhelmed with all that goes into purchasing a car, but it’s important to stay focused and do research. One should keep in mind that the customer and the other party have very different agendas, Sweedler said.

“You have to remember that you’re there to buy a car that meets your needs and they’re there to sell you a car that makes money for them,” Sweedler said. “My rule of thumb is read everything, and if you don’t understand it, have someone else that does understand it read it. Do not assume that the contract will be written to your advantage.”

Sweedler said car dealers are more inclined to talk about monthly payments and less about the total cost of the car. She recommended that students bring someone else with them when purchasing a car. 

“If you’re in the process, give yourself some breathing space,” Sweedler said. “Sometimes it’s very helpful to walk away, think about it and come back.”

Morgan can be reached at [email protected].