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A Recent Graduate’s Guide to Buying a Car

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2015-chevy-equinox

There is a good reason they call these ceremonies “commencement exercises.”  Graduation is not the end; it’s the beginning. ~Orrin Hatch

Transitioning from the classroom to the meeting room is not always as smooth as you anticipated before graduation. Although college gives you the education you need to land your dream job, it doesn’t always offer the life skills you need to make important decisions in the real world. One important decision many college graduates are faced with is buying a car.

For most Americans, buying a car is the second most expensive purchase they will make after buying a house. This makes buying a car a pretty big deal. Since graduation is just around the corner for many seniors in the Sacramento, CA area; here are some helpful car buying tips from Performance Chevrolet:

New vs. Used

Before heading to the dealership, first consider whether you should buy a new or used car. As a soon to be or recent college graduate, chances are you have student loans or other financial commitments such as rent to deal with. Here are questions to ask yourself before committing to buying a car:

  1. Can you afford a down payment? If your credit score is not that great, chances are you will be faced with a larger down payment. Also, financing a used car usually requires money down. Before making any rash decisions about buying a new or used car, be sure to find out what your credit score using our Credit Score Estimator.
  1. Can you afford to maintain a used car? Unless you are buying from a trusted local dealership such as Performance Chevrolet; you better think twice before settling on a used car. The last thing you want is dealing with maintenance costs on top of your monthly payments. Also, you’re going to need a reliable car for that new job you just landed.
  1. Do looks matter more than efficiency? A used car might not have the looks you’re going for, but have the perfect gas mileage. If you are always on the road, you’re going to need a ride that has good fuel efficiency. Take the time to shop around. The more research you do, the more likely you are to find incredible deals on brands that aren’t quite as mainstream.

Buy Vs. Lease

Both buying and leasing a car have their pros and cons. Buying a car means making monthly payments for a car that you will eventually own. On the other hand, leasing involves making monthly payments on a car that you do not own. If you want to drive a nicer car, however, leasing may be the right option for you.

The term of an average loan is longer than that of a lease, which allows you to keep your monthly payments as low as possible. On the other hand, a lease term is shorter which allows you more flexibility. Other benefits that come with leasing a car include:

  • Being able to pay for the sales tax over the period of the lease rather than all at once.
  • Added insurance against unexpected losses.
  • Driving a new car every two to four years.
  • No used car problems.
  • No down payment.

Buying a car has its benefits too. Not only will you own your car after you are done with payments, you will never have to deal with excessive mileage charges. Here’s a list of other benefits of buying a car instead of leasing:

  • You may be able to negotiate a more favorable interest rate on a loan.
  • You may be able to get a “zero money down” loan via college graduate programs.
  • Buying a car is more economical if you plan on driving the same car for a long period of tome.
  • No penalty of driving over mileage limit.
  • You get to sell the car whenever you want.

While buying a used car is a good purchase for some people, buying a new car is a better choice for others. Keeping an open mind throughout your buying process is a great way to end up with the car that is right for you. Whether you decide to lease a new car or buy a used one, be sure to consider all your financial commitments along with driving needs first.

Be sure to buy your car from a well trusted dealer such as Performance Chevrolet. We offer new and used cars with special financing whether or not you have a good credit score. Even if you choose to finance with one of our several partnered bank, we will do our best to help you get the financing assistance you need.

Don’t let car problems slow down your career goals. Visit our finance department located at 4811 Madison Avenue, Sacramento, CA, 95841 or give us a call at 866 625 6949 for a list of all our financial offerings.

Sources:

http://usnews.rankingsandreviews.com/cars-trucks/Buying_vs_Leasing/

http://money.cnn.com/magazines/moneymag/money101/lesson17/index4.htm

 

 

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