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Should you buy your college student a car? The answer to this question will depend on your specific situation and budget. A car is convenient to run errands or to visit friends and family. This is especially true if your child attends a school that is out of town. The best way to answer this question is to look at the pros and cons of owning a vehicle and apply it to your unique situation.
Benefits- Although cars can be expensive, they are convenient to have on campus. Campus stores are similar to airports and movie theaters where you pay a premium for the convenience. These costs can add up over time and may exceed the cost of owning a car. A car allows students to comparison shop off base for school supplies and food. This is not easy to do via public transportation or a bicycle. Depending on the distance, a car can allow your child to come home more frequently and cheaper compared to a bus, plane, or train ticket. A car can also make it easier for your child to find a part-time job. Having a car available will also give you peace of mind knowing your child won't be dependent on anyone for a ride.
Drawbacks- Some key drawbacks to owning a car besides the purchase price is insurance, accidents, fuel, maintenance, registration, tickets, theft, and damage. The average costs of insurance for young drivers is over $3,100 a year. This can dramatically increase depending on your location. Accidents, thefts, and speeding or other tickets can raise the costs even more. Fuel prices are constantly fluctuating and the average price for a student is over $1,200 a year. If the car is past its warranty period, maintenance costs could be nearly $800 a year for the average car. Depending on your location, registration costs can be in the thousands per year.
Besides the pros and cons listed above, the information below should also be considered before purchasing a car for your child in college.
Some College Campuses Don't Allow Freshman to Have Cars on Campus
Before purchasing a car for your freshman, you need to check with your child's school to make sure that freshmen are allowed to have a car on campus. There are a variety of reasons why some colleges prevent freshmen from having cars on campus. Some of the common reasons are listed below:
Limited parking- Most college campuses simply have limited parking. To alleviate this problem, some campuses will not allow freshman to have cars on campus since they typically have the largest class. This usually drastically reduces the number of cars on campus.
New freedom- For most freshman, college is their first taste of freedom from their parents. This can lead to some bad decisions as they navigate through their first year of college. Partying and drinking is a big problem on college campuses so some colleges stop freshman from having cars to try and prevent drunk driving or other bad decisions behind the wheel.
Lack of sleep- Freshman have a lot on their plate and it can be overwhelming at times. This alone can make it hard for them to get proper sleep at night. Some colleges feel that having a car will be an added distraction that could keep them out late and limit their sleep.
Campus life- Some colleges will ask freshmen to leave their cars home in an attempt to get them more involved in campus life. The idea is that students that are involved on campus tend to have better grades, are happier socially, and usually will finish their degree at the school.
Distraction- Some colleges feel that freshmen with cars will be involved in various activities off campus too often and that their academics will suffer. They also feel that cars are a big responsibility and that things such as maintenance, tickets, and other issues can distract from their studies.
Tips on Buying a Car for College
Now that you have decided to buy a car for your college student, you have to try and find the best car for your budget. The tips below will help you during your car shopping endeavors.
Buy used- If you are on a limited budget, a used car is an ideal option. Look for a car that is at least three years old because after this time period the value of the car depreciates rapidly. If you look around, you can find a car that is in excellent condition that has low miles and maybe some warranty left. Also, as the value of the car drops, the registration costs will typically decrease in most states. Additionally, the insurance premiums will also be lower on an older car due to its drop in value. This all means that the overall cost of ownership for the car will be lower.
Shop at a Dealer- Although it is possible to find a good used car through a private seller, it can be a bit riskier and take more time. Below are some benefits of buying from a dealer:
- Dealers are also subject to lemon laws and implied warranties.
- A dealer has "Certified Pre-Owned" cars that are typically in better condition and have a warranty.
- Dealers take trade-ins.
- Dealers offer to finance if you can't pay cash.
How to Pay– If possible, always pay for the car with cash. This will keep you from having to pay any interest charges or having a monthly payment. If you have to finance, be patient and shop around. Most dealers will offer financing, but they may not always have the best interest rates. Your bank, credit union, or another financial institution could be a better option. Additionally, a credit card with a high limit and low interest could also be a good option. It is important to make sure that the sticker price actually matches the estimated value established by reputable firms such as Kelly Blue Book.
Pre-inspection- It is good practice to have a mechanic perform a pre-purchase inspection on the vehicle before buying it. This is typically inexpensive but can save you thousands in the long run. This is more important for cars that are not "Certified Pre-owned".
Common Questions and Answers
What are some alternatives to purchasing a car for my student? Some other alternatives are public transportation, a bicycle, car-share programs, or simply walking.
Should I add my child to my insurance policy or have them get their own? Insurance is very expensive for young drivers so you have to see which option is the least expensive. A benefit of having your child get the insurance in their name is that they get to establish a history of having insurance.