Where should I get a car loan as a college student?
I'm a college student that makes about $1,200 a month and I want to buy a car. I also have about $7,000 for a down payment.The vehicle I want to buy is $12,000, but I'll only need to finance the remaining $5,000. Where can I get the best loan rate?
“First off, ask yourself this question: Do I need a $12,000 car when I could pay $7,000 in cash for a car? The answer is probably no.
But if your mind is made up, your first stop should be to a local credit union. These institutions can usually provide the best rates compared to banks or dealerships.
If you have little or no credit, you may have to shop around a bit more, but you should still be able to find financing. You should also expect an interest rate on the higher end, like 8% to 12%.
Don’t forget that if you finance a vehicle, you’ll need full coverage car insurance.
For a young driver with their own car, this could realistically run you as much as $400 or even $500 a month. The cost of insurance and maintenance may be another reason to buy a car with cash.
Budgeting for insurance can be expensive and stressful, but the free Jerry app can help you find the best deal. Jerry compares rates from the top 50 companies in under a minute, delivering the best deals to your phone.
While it’s your decision, avoiding a car loan altogether will likely save you money in the long run.”
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