Onto the next adventure! Graduations are a peak time during April, May, and the first few weeks of June. College and high school graduates will be walking into a new path of life and starting a new phase, which we understand entirely here at Investment Auto Group. Graduations are another type of “walking down the aisle” that is just as important. It’s also a point of growth – moving to a new city, working at a new job, moving away from home, and everything in between. And, we always look forward to welcoming parents of high school seniors and college graduates into our dealership.
We want parents and graduates to shop with confidence and complete certainty about what they plan to purchase. One of the first “adulting” milestones is purchasing a vehicle. But, before you go and get that new set of wheels, you must consider a few things like cost, ownership, financing, and reliability. This article will stress that you do extra research before coming into the dealership to know what you want, and we can help you find what you’re looking for. So we compiled a list of five considerations you should keep in mind when purchasing your first vehicle post-graduation.
- 1. New vs. Used
If anything, one of the first things you need to consider when purchasing a vehicle is whether you should purchase it new or used. There are pros and cons to both, but overall it’s dependent on what you’re looking for. When you’re buying a new vehicle, you have the option to get your “dream car,” especially if it’s something you’ve been saving for. Your everyday commute will include updated features, technology, and reliability. Depending on your credit score, you can also get special offers like cash back or 0% financing.
However, according to a New York Times article, purchasing a used vehicle between 1 to 6 years old is ideal for high school or college grads. Depreciation for used cars is less than for new vehicles, meaning they won’t lose their value as fast as new ones. On top of that, used cars, especially certified used cars, can be the best way to go. You’ll have history, safety reports, and perhaps, even better warranties.
Purchasing a used vehicle means that you can still have the latest technology and features, but at a lower cost. You’ll have the chance to save money, and if you were a college student who had to take out student loans, used vehicles are the way to go. If you need more direction, check out our other blog here, where we go into more detail about the benefits of purchasing pre-owned vehicles.
- 2. Leasing vs. Buying
If our blog is called “5 Considerations for Every Grad Buying a Vehicle,” why are we talking about leasing? In some cases, some graduates may not have the “right” credit score to buy a vehicle. They may have saved money, but it may not be enough to make a down payment. It’s ideal for affordability because if you want a particular vehicle, but can’t afford it, then leasing gives you the option of lower monthly payments. Leasing may be suitable for a few years until you actually want to settle down, then you can think about investing in purchasing one. And, let’s face it – you’re young with lots of living to do. So if you’re planning on moving to a new country or taking a trek across Europe, then leasing is better than making monthly payments on a vehicle you’re not using.
With that said, purchasing a vehicle may actually be a better investment. When you lease, you have to stay within a specific mileage and return it in the same condition you leased it in. But when you purchase a vehicle, you own it once it’s paid. You don’t have to worry about mileage or spilling your coffee on the seats. You’ll also have the option to sell or trade-in your vehicle. When you’re ready to upgrade your vehicle once you get engaged or start a family, you can do either.
- 3. Financing
Unless you’ve saved up a lot of money (and we mean a lot), your best bet is getting an auto loan. It’s better to do your research ahead of time by looking into different options, like bank loans, credit unions, and dealerships, and then comparing them to figure out the best financing option. Once you figure out what works, it’s time to get a pre-approved loan. If you don’t have a good credit score or no credit history, then you’ll need to figure out who the cosigner should be – usually a parent or older sibling. A note to keep in mind: when you submit your applications, be sure to do it within a two-week period because this can impact your credit score.
- 4. Costs
When you purchase a vehicle, costs shouldn’t be overlooked. Insurance, registration, gas, and maintenance are a few key things to consider. This is where your budgeting skills come in. If you’re a college grad, this might be easy, but if you’re a high school grad, then this can be daunting. Luckily, some apps can help you manage your budgets, like Mint or Goodbudget.
Not only that, but you also have to pay for insurance. Do some research about what kind of insurance you’ll need and compare which insurance is most promising. There are also discounts you can get like Good Driver and Military discounts. It’s also best to check your state to get an idea of registration fees, especially if you’re purchasing a new vehicle, because they tend to be costly.
- 5. Reliability & Practicality
When it comes down to purchasing a vehicle, you want to be able to enjoy it. Before you purchase, make sure you have an idea of the features and technology you want, like a touchscreen, 4-passenger seating, seat warmers (hey, we’re not judging), or anything else. Do you want a 4×4 or an all-wheel vehicle? Removable seating? Extra cargo space? A V6 or V8 engine? These are all valid questions and things you should consider when looking for a practical car for your next phase of life. It’s also recommended to check the history and safety reports for the vehicle you want. An excellent site for reference is Kelley Blue Book.
You need to sit down and think through many things before making the purchase, but once you know what you want, come to our Centerville location, and we’ll be happy to help!