Driving around in a 1996 Dodge Neon became too much for senior Faith Davis.
Faced with the thought of graduating with an unreliable car she made the decision to search for a new one. Besides Davis, an increasing amount of college students are buying new cars and the industry is taking notice.
"It is such a big decision and I wanted to weigh all of my options," Davis said. "A car is a serious investment."
She said her dad warned her to not be too eager when she went to look for a car. Davis searched the Internet for information so she could ask the salesperson the right kind of questions. She said she wanted to feel as if her decision was an informed one.
"I wanted to understand what they were talking about and not get taken advantage of," she said.
Dealerships are looking for students like Davis who are in school and shopping for a car. According to a study by 360 Youth College Explorer, one in every eight college-aged student is expected to buy a car in the next year, which equals to almost one and a half million cars or $14.8 billion in sales. Dealerships have a range of buying packages to choose from and she wanted to find a deal that offered incentives for students.
"In order to get the best deal, you gotta do your homework," Davis said. "This was my first big purchase so it required a lot of thought and some serious money management skills."
Students want to make sure they are getting what they pay for. The study also ranked the major influences in decision making. Four out of five students said overall quality, dependability and price were "very important" while factors such as color, style and impressiveness did not rank as high. The study also showed that students were more concerned with the practicality of the car than the brand, only 33 percent said a certain model was important when buying a car.
"I knew I wanted a Honda or a Toyota because I know they're dependable," Davis said.
She said she was able to buy the car she always wanted, a 2005 Toyota Corolla, and negotiate a reasonable price. She said she wanted to make the best decision because this car would have to last for a long time. She also said purchases like this are reflected on credit reports
Factors like credit history and employment are taken into consideration by car dealers. They influence car financing and what type of payment plan is available. Whether the car is new or used, leased or paid outright, there is much to consider when purchasing a new car, Barry Almonrode, a sales consultant at McCoy Bill Ford, said.
"It is important to remember that the purchase price is just the starting price of calculating the cost of a car," Almonrode said.
He said students will need to allow money for other costs, which include transfer fees, registration, insurance, running costs, maintenance and servicing, he said. Many buyers prefer leasing new cars because the payments are the same as buying, but with better options.
How to pay for a car is another major decision. The size of the monthly payment depends on the loan amount and loan terms. He said in order to figure out the loan amount, buyer's need to subtract the trade-in value of the current car and any down payment from the purchase price.
With decisions like payment plans, loans and dependability, buying a car is not a simple decision.
"Do your research about the car you want, before you hand over your hard-earned money," Davis said.
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