College is an exciting time, full of new experiences and opportunities. Unfortunately, not all are within walking distance! And so, you’re thinking about buying a car. Whether you need a reliable way to get to and from classes or you’d like more freedom of movement overall, a car can enable you to do what you want, when you want.

But where to start? You’re in the right place. Below, we’ve answered some common questions students ask about buying a car while in college. From where to get the money to making the right car choice, we’ve got you covered.

How Can I Afford a Car? 

First things first: Take a look at your savings account and budget to see how much money you have to spend on a car. (Don’t have a budget yet? These tips can help you create one.) If you’ve been saving for this day, then you may have enough cash in your savings for a down payment (typically at least 10% of the total cost of the new vehicle) and enough room in your budget for monthly car payments, insurance, registration fees, gas and any parking permits your college may require. If you haven’t saved for a car yet, you may want to spend some time doing that before you start shopping. 

Here are a few ideas for putting your savings efforts into high gear:

  • Track your spending to see where you can cut back, like eating at home instead of going out or canceling subscription services you don’t use anymore.
  • Build savings goals into your budget.
  • Get a part-time job or, if you already have one, see if you can work a few extra hours each week and stash those earnings into your savings account.
  • Set up automatic deposits into your savings account from each paycheck.
  • Put any cash windfalls — monetary gifts, raises, bonuses, tax refunds, etc. — into your savings account.

Which Car is Right for Me?

As tempting as it may be to set your sights on the hottest new luxury car, think realistically about what you need in a car and how much you can afford. Remember, this is your first car, not necessarily your dream car! Here are some things to consider when comparing makes and models: 

  • How much you’ll drive - If you’ll be driving a lot — commuting to classes or work every day, making frequent trips home, traveling during breaks, etc. — you’ll likely want a car with high fuel efficiency (to save you money on gas) and low mileage (to reduce the likelihood of needing repairs). Those considerations may be less important if you will be driving infrequently and locally — just to make weekly grocery runs, for example.
  • Features - Certain features can add cost to the price of a car, so be selective. Consider the terrain and typical weather patterns of your area to make sure you get any safety features you need — four-wheel drive for snowy conditions, for example — but think twice before you decide to pay extra for that optional sunroof.
  • Repair costs - Some cars are more expensive to repair than others. Check around to see how much replacement parts and labor cost for the make and model you’re considering before you commit. You may not need to do any repairs right away, but when the need arises down the road, you can be better prepared for those costs.
  • Reviews - Ask friends or family members if they’ve had cars they’ve been especially happy or unhappy with, and read online customer reviews. Pay attention to the positive and negative comments when evaluating your options.

Should I Buy New or Used?

Once you have an idea of the type of car you want, you need to decide whether to buy new or used. Here are some factors to consider: 

  • Price - New cars can be expensive. They also depreciate quickly, meaning they begin losing value as soon as someone buys and begins driving them. That’s one reason the price on a used car can be so much lower than its new-model counterpart. Other reasons include mileage and condition.
  • Mileage and condition - The more mileage and wear a car has, the more likely it may be to require repairs. If the car wasn’t well cared for by its previous owner, those repairs could end up costing you quite a bit over time. Before buying used, check the vehicle history report and consider having a mechanic look the car over. 
  • Cost to insure - Car insurance is important because it protects you and other involved parties should an accident or other damaging incident take place. It’s also required in most states, although requirements vary. The cost of car insurance varies, too, depending on factors including: the year, make and model of car; where you live; your age and any previous accidents you’ve had. The insurance premium for a new car can be as much as twice that of a used car. Shop around before you make your choice to make sure your budget can withstand the cost of the policy you’ll need. 

Should I Get an Auto Loan?

A car loan gives you the opportunity to pay for your vehicle (new or used) over time if you don’t have enough cash on hand to buy it outright. Typically offered by a financial institution, an auto loan has a set term and either a fixed or variable interest rate. (Learn more about how financing works.) 

Some lenders have special loan offers and interest rates for students who are just getting started building their credit histories. They will need proof that you are able to repay a loan, however, so be prepared to:

  • Show that you have a steady source of income.
  • Share your good credit score, if you’ve established one.
  • Have a co-signer lined up in case you need them.

You should apply for an auto loan only if you are certain that you will be able to make the monthly payments, on time every time.

Do I Need a Co-signer? 

If you don’t qualify for an auto loan on your own, because either your income or credit history doesn’t meet the lender’s criteria for loan approval, then you will be required to have a co-signer on the loan. A co-signer is an individual — often a parent or other trusted family member or friend — who agrees to repay your loan in the event you are unable to fulfill your obligation to pay it back. Their signature provides the lender with reassurance that the loan will be paid back in full.

As you decide whom to approach to be your co-signer, keep in mind that you’re asking them to take on some risk: If you don’t repay your loan, they have to. Also, if you make one or more late payments, or you default on your loan, their credit could be negatively affected just as yours could. These potential consequences reinforce the importance of being certain about your ability to repay a loan before you sign the loan agreement.

Can I Buy a Car Out of State?

If you are planning to buy a car in a state that’s different from where your college is located, keep in mind that each state has its own rules for registration and car insurance requirements. There can also be tax implications for buying a car out of state. Do your homework before you start shopping:

  • Contact the state department of motor vehicles (for the state in which your college is located) to ask about the laws that regulate out-of-state vehicle registration and insurance requirements.
  • Consult a tax advisor if you have questions about the sales tax or potential deductions related to your out-of-state vehicle.

Now that you know these important basics about buying a car as a college student, you are ready to roll. Check your finances, do your research and weigh all the important considerations, and you could find yourself driving around campus in no time!

Are you looking for an auto loan? Consider PNC Bank. We provide a wide variety of finance options for new or used vehicles, including refinancing.