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How do I buy a car using my student loans?
I want to buy a car using my student loans, as I'm thinking of putting off school for another year. Can I do this?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Although there’s no oversight of what you do with student loans once the funds hit your bank account, using them to buy a car is a poor idea.
If you use your student loan to purchase a car rather than go to school, your finances will be in worse shape overall due to:
- Your vehicle’s depreciation (it decreases in monetary value each year)
- A higher interest rate than a standard car loan, in most cases
- A long loan term (you’ll still be making payments long after you’re ready to sell the car)
In summary, buying a car with student loans creates far more problems than it solves. If you need a car, consider saving up to buy a
used car
. Whether you buy a new car with a
car loan
or purchase a used vehicle with cash, you’ll need car insurance before you can get behind the wheel.That’s where
Jerry
comes in. Just complete a quick 45-second sign-up, and you’ll be able to compare competitive quotes from top providers like Nationwide, GEICO, and State Farm. View full answer
- Gregory R.
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