Congratulations, college grad! After 4 years – or 5 and change – of burying your nose in books and sweating through final exams, you’re finally ready to tackle a real test: Adulthood.
It probably feels good to have a diploma showcasing your ability to adapt and overcome. But with that degree you’re also tasked with lots of new responsibilities: paying rent and student loans, dealing with the bureaucracy of the business world, and, of course, purchasing your first new car.
For those in the latter camp, here are 8 tips and informative tidbits to keep in mind before you buy or lease a vehicle and venture out into the real world.
- Understand the basics
Get to know the car-buying dos and don’ts before you even settle on a make, model or car dealership. Learn some common dealership slang. Understand the differences between terms like MSRP, asking price and invoice price. Identify the pros and cons of leasing and financing as they pertain to your individual circumstance.
Essentially, read, read, read. And when you think you’re done reading about buying cars, read some more.
- Start researching
Don’t let your first adult mistake be choosing the wrong vehicle or a bad car dealership. Research everything you can. Below are some places to start:
- If MPG is top of mind, review fuel economy ratings on unbiased sites like fueleconomy.gov.
- Check vehicle safety grades and ratings from the NHTSA.
- Review the top or most reliable vehicle manufacturers at U.S. News.
- Read vehicle reviews on popular sites like Edmunds or Motor Trend.
- Identify car features that you absolutely, without a doubt must have.
- Compare models on your shortlist to each other. (We have a Honda vs. Competitor comparison page that will certainly help.)
- Know your budget
Don’t be tempted by the newest and freshest gizmos. For most new graduates, those range-topping vehicles aren’t likely to play nice with their budgets. Be practical – your car should be reliable, good with gas, spacious enough for most errands, and have the ability to get you to and from work.
For instance, a fully kitted Honda Accord Touring, complete with Wi-Fi and a HUD, may be on your wishlist, but are you taking home enough dough to make your monthly payments? If not, consider an alternative, like the Honda Accord Hybrid. (It’s a dream car, too!)
Figure out your maximum budget based on your net pay, not your gross salary. Try to give yourself leeway in case an emergency puts a hole in your savings – stick to a car payment that equals no more than 10% of your take-home pay, after a down payment. So, if you’re bringing in $2500 per month, aim for a monthly lease or car loan payment of $250, preferably less.
- Don’t forget extra expenses
Why shouldn’t you spend more than 10% of your salary on a car? There are lots of other vehicle expenses to consider, like car insurance, annual vehicle registration, routine maintenance, fuel, and emergency repairs, just to name a few. Savvy shoppers might even incorporate these costs into their budget.
- Consider leasing a vehicle
Lots of younger car shoppers are opting to lease for several practical reasons, such as the following:
- You can usually get a lower monthly lease payment compared to financing
- A leased car rarely needs major repairs aside from routine maintenance
- After the lease expires, normally after 36 months, you can lease another new model
- You’re never not covered by a new vehicle warranty
Be sure to lease from a qualified dealership, not a 3rd-party leasing company; these companies aren’t always able to guarantee warranties or terms.
Of course, you’ll need to beware of mileage limits and other terms or conditions that may be costly if they’re broken. Most car leases are restricted to be driven 12,000 miles per year; if you tend to pound the odometer, a lease might not be right for you.
- Your dealer matters
Would you rather have a degree from Stanford University or Stansbury Community College? That same logic applies to dealerships.
A bad car dealer can ruin the entire shopping experience for you with poor customer service, rude salespeople, overpriced vehicles and more.
Instead, choose a legitimate dealership that puts you first. Look at car dealerships near you and read customer reviews to separate the good from the bad.
- Don’t skimp on test drives
These days, a surprisingly high number of customers skip taking a test drive. Honda’s reputation may be pristine, but a test drive is a crucial step that shouldn’t be missed! Test out as many vehicles as you’d like – this is an important and costly decision, and you don’t want to be left with a car or crossover you simply won’t enjoy for years.
- Browse incentives
College graduates can usually get a deal on a new car thanks to special automakers’ programs. For instance, all of our Valley Honda Dealers offer eligible graduates a $500 offer on any new Honda vehicle. The Honda Graduate Program deal can even be applied on top of other Honda incentives and dealership specials, making it a very favorable option for younger adults.
Are you eligible to receive this $500 Honda deal? Contact one of our Arizona Honda dealerships near Phoenix to get a quote and find out.
There’s no denying that your hard, degree-earning work is deserving of a reward. However, don’t jump into the car-shopping process without first doing your due diligence. Read. Research. Inquire. Then you’ll be ready to buy your first car out of college.
If you’d like to learn more about any of our Honda dealerships in Arizona or how to get a deal on a used car straight out of college, just find and call us to get started. We serve all of central AZ, including Tempe, Scottsdale and Phoenix.