Making buying a car easy

The car buying process can be daunting for even established adults; for college students who are young in their financial life, it can be even scarier. 

Terms like “interest rate,” “credit,” and “pre-qualified” fly around, often with students not knowing what they mean. 

Isaac Norris and Kim Babington want to make sure you understand everything about buying a car, from financing to driving one off the lot.

Norris, a salesperson at locally and family-owned Vogler Ford in Carbondale, has a few things that students should be mindful of when purchasing a vehicle. 

“Honesty is always the first thing… you want to be able to trust your salesperson. Make sure it’s a good running vehicle, that it’s in good shape.”

Norris also recommends doing a little bit of research before coming to a dealer.

“Definitely want to do a background report [such as a Carfax report]. Maybe even talk with the bank and make sure you know how much you can get qualified for and how much you can get approved for.”

After you find the car you want, there is a multitude of ways to finance. 

Norris recommends financing through a dealership, although it should be noted doing so benefits the dealership.

“They’re able to pick out what bank is going to give the best [interest] rate, the best offer,” Norris said.

Another option for financing comes from the SIU Credit Union. Babington, the vice president of community outreach has advice about the process of buying a car and financing through an institution outside of a dealership. 

“Have another adult with you. Know what you’re looking for. And make sure you are checking Carfax and the [Kelley] Blue Book value,” Babington said.

Babington also recommends visiting a financial institution and getting pre-approved for financing before going to a dealership. That way, she said, you are more likely to get a lower interest rate on your loan, and you are less likely to be sold something you may not be able to easily afford. Of course, financial institutions have a vested interest in keeping the financing with them, since they earn the interest.

Interest rates are a critical part of any loan payment. The higher the interest rate, the more money you are going to end up paying. Interest rates are always going to be a part of any loan from a bank, dealership or credit union, as interest is how they make money. 

Interest is essentially money that you pay the bank for giving you a loan. You must pay back both the entire amount of money you borrowed, as well as the interest to the bank. 

Babington, who has worked in the financial industry for 42 years, also suggests that students get loans that are specifically for cars rather than using their student loans to get a vehicle.

“My suggestion to a student is if you have a student loan, you use that only for your student purposes… take out what you just need.”

Credit is an important aspect to consider for a loan as well. Credit is a number based on your financial history that tells the place you are borrowing money from how likely you are to pay it back. A car loan is a great chance for you to build credit while still in college, whereas a student loan does not allow you to build credit because you are not currently paying it off.

“When you do an auto loan [through student loans], you are not building your credit,” Babington said.

She also said there isn’t really a “best” time to buy a car except for when it’s right for you, even if dealers are running promotions that seem appealing.

“That depends a lot on the dealers… you just have to be very, very careful with what you’re doing and how you’re doing it,” Babington said.

She has two final pieces of advice that she stresses.

“Go by a budget. A lot of people have a budget but don’t go by it. If you don’t have a budget, you can’t really be financially fit in the future… When you’re getting these loans, put them on automatic transfer so that you don’t forget to make your payments. That helps your credit and your credit score,” Babington said.

Paying attention to the full price of the vehicle is another important thing to remember; though you may be able to afford the monthly payment, you may be paying a much higher interest rate or a longer term loan than you really want to have.

Waiting until you have a bit more money saved for a vehicle isn’t a bad thing either. If you don’t have the money to afford a decent car, it’s not a bad idea to try and save a little more.

“You get what you pay for,” Norris said. 

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