Heading to College: Should You Buy a New or Used Car?

Each year, millions of teens graduate high school and head for the halls of higher learning, otherwise known as college. As people who have been through the experience know, moving into a college living space is similar to occupying a new home. Lots of items are needed, and some of them can have a big price tag. For many students, the most expensive item is a car.

New Car or Used Car?

Most people would choose a new car over a used one. However, because the personal freedom a car offers is one its biggest appeals to college students, you might not feel exceptionally choosy about the car you buy, as long it looks good and gets you where you’re going. Even so, the question remains: Is a new car a better option than a used car, or vice versa?

 

To answer the question, let’s look at three important criteria that any car buyer should consider: cost of purchase, maintenance cost, and mechanical reliability.

  1. Cost of Purchase

Most used vehicles cost less than half of their original price. If you’re paying for your education, saving thousands of dollars on a used car probably sounds appealing. What’s more, if you plan on applying for direct auto loans to buy a pre-owned vehicle, now is a good time to act.

As of the date of this writing, our rate for a 36-month used car loan has an APR of 2.24%, while direct auto loans for new cars have an APR of 1.74% over the same time period. Auto loan rates can change quickly, making it important to lock in an attractive rate when you find one.

Posted By: AmericanEagleCU


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