Should Students Buy A Car For University?

Now British students are learning to live with debt as part of their graduation package, research from the USA on car leasing for students has relevance here too. It’s hard to find a job these days, yet to get to work a car is close to a necessity. Add to that the huge premiums insurers are now charging younger drivers and the decision whether to lease or buy a car is a big one.

In the States, 18 – 34-year-olds bought 30% fewer new cars in 2011 than they did in 2007. That’s an enormous drop-off in a very short space of time and some of that is due to students opting to lease rather than buy.

Should Students Buy A Car For University?

The expert view is that students and new graduates should weigh up the sums carefully. Leasing may seem an attractive option to put off a huge cash outlay, but there are other factors to consider too.

Set your budget

The first thing to do is to set a budget and make sure it’s realistic. It’s important to remember that your credit history is something that is worth protecting. Missing payments could have ramifications for your ability to get a mortgage and other credit later on, so it’s important not to over-extend yourself with a Frontier car leasing deal.

One financial planner recommends that you should never exceed 10% of gross income for car payments.

Even if you buy, the process of loan approval if you need to finance your purchase, will give you a picture of what sort of credit risk you represent.

The problems of leasing

Leasing requires discipline. It’s a discipline that is enforced with stiff penalty payments, whether that is for going over a mileage limit or not returning the car in a suitable condition. If you struggle with discipline then you may struggle with a car leasing deal.

Like renting a home, leasing can also feel like wasted cash. You can opt for a lease-to-own plan or even go for a straight hire purchase deal if you don’t want to feel like you’re never moving towards ownership.

The pros of leasing

Most lease deals will give you a lower monthly payment than simply financing a car purchase on credit.

There’s also flexibility – you can select a short-term deal if you’re not sure about the financial commitment.

For most young people, a new car is well out of their price range even if they do buy. Leasing can open up newer models, and may come with a maintenance package. You won’t have the worry that comes with buying an old banger that might see you off the road and out of pocket on a regular basis.

The problems of buying

Buying may be attractive, but cars start to shed value as soon as you leave the garage. You’ll also need to budget carefully for fuel costs, tax, insurance (a huge problem for young drivers) and repairs.

You’re also stuck with your choice until you can afford a new car. You may be young, free and single when you buy your car, but how long is that going to be the case.

The pros of buying

Freedom is the single biggest advantage of owning your own car. There are no mileage limits and no monthly payments  – it’s yours, and so is the open road.

If you can buy new, you can take advantage of the enormous strides in reliability and economy car manufacturers have made in recent years.

Whether you choose to buy or sign a Frontier car leasing deal, do your sums first seems to be the best advice whatever your age.

Derek Devlin has written for a variety of websites and auto blogs and is a lover of anything on 4 wheels.

Author: SmartStudent

SmartStudent is an educational portal that provides information & advice to aspiring students. regarding applying to university, choosing a course, what to take to university, finding student accommodation and much more.

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