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Having a Car in College: Is It Better to Buy or Lease?

studentcarTeen drivers have declined 12 percent from 2006-2012, a study by the Highway Loss Data Institute found. A prime reason for this may be that the high cost of car ownership, insurance, fuel and maintenance is simply too high for most young people. While a car allows you to commute to a job off-campus and head home to see your family anytime, it does not come cheap. Dig deeper into the benefits of buying and leasing to determine which model is best for you.

Buying a Car

College and the years right after graduation are often full of changes in location, job, career and lifestyle that can make it difficult for you to anticipate whether you’ll need a car in the near future. Still, a car is an asset that you can build your credit with, as College Board explains. If you are buying a new car, you’ll reap the benefits of manufacturer’s warranties and won’t have to pony up for most repairs. If your needs change later, you can sell the car to earn some money. You’ll save up front by buying a used car, but will need to save and pay for vehicle maintenance and repairs on your own instead of receiving warranty coverage.

If you decide that you want to buy, but don’t have the money outright to pay for the entire car, financing is also an option. If you are thinking of financing, come up with a realistic picture of what you can afford to pay each month by calculating your finances and your expenses. Then select a financing option that fits your budget and commit to making regular payments before deadline. This will help build your credit, which benefits post-college life.

Leasing a Car

Leasing can be ideal if you’re not sure that you want to have a car in the long term, but know you want access to a car now. When thinking of leasing, read the terms of the lease agreement as they will specify how many miles come with the lease. As a student, you probably do not need a high mileage limit since you’re unlikely to drive the car every day. However, if you have a long daily commute to campus or work, then it’s worth crunching the numbers before you commit to a lease. Exceeding the mile limit will cost you when you turn in the car at the end of the lease. Leases generally run for a 24- to 36-month lease term, which should meet student flexibility. There are “cancel anytime” programs available if you are unsure whether you can commit to the conventional lease term. These flexible leases can also be ideal for students who may need a car this semester but not next, for example.

If keeping payments low is your primary concern, and you don’t know whether you need a car after school, then leasing can be a convenient and cost-effective choice. Monthly payments and one-time down payments are typically lower with leased vehicles than with purchased vehicles. Plus, you’ll receive a warranty that will cover most of the repairs you’ll need to make. If you do decide to lease, make your monthly lease payments on time to help build credit.

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One Response to “Having a Car in College: Is It Better to Buy or Lease?”

  1. Marie Zalbe says:

    Here in my country, most college students have their own motorcycles like my sister. It’s not because motorcycles are cheaper than cars but motorcycles are more money-saver way also. My sister can definitely save from expenses with commutation and at the same time, paying gasoline is cheaper than cars.