This website has already discussed numerous strategies that can be used to save money so that additional cash can be devoted to student debt. As previously mentioned, living at home is a viable cash-saving tactic for many student debt borrowers, and there are a variety of mindsets that can be employed to cut expenses. Although many people need cars for their daily lives, having a car while paying off student loans might be an unnecessary expense that should be eliminated so that additional cash can be devoted to student debt.
During my student debt repayment saga, I never had a car. In my area, most people with cars needed to pay for parking, so it was especially expensive to lease or own a car. While paying off student loans, I also lived in locations where I was able to travel to most places with public transportation. If I ever needed a car to visit family or for work, I usually used Uber or Zipcar to get around.
After paying off my student loans, I moved to an area where I need a car, since there is less public transportation in my neighborhood now. The experience of leasing a car has shown me that having a vehicle while paying off student loans should be avoided at all costs.
My grandparents always told me that cars are “money pits,” and I only really appreciated this understanding once I had a car myself. When you own or lease a car, you have to shell out several hundred dollars a month in car payments. On top of that, you also have to pay for insurance, which is usually over a hundred dollars a month. Furthermore, you also have to pay for oil changes, brake jobs, light replacements, and any other expense related to fixing the vehicle. On top of all of this, you also have to pay for gas just to operate the car.
In addition, if you live in an urban area, you will also likely have to pay for parking. Fortunately for me, my condo comes with one free parking spot, but if you have to pay for parking yourself, you might have to shell out hundreds of dollars a month for parking. In addition, it is worth mentioning that even the most careful of drivers will have to deal with tickets at one point or another, and this could easily cost hundreds of dollars each.
During my student debt repayment saga, my brother (who was also my roommate) and I agreed to take over my other brother’s car lease for a few months, since he no longer needed the car. Since we were splitting the cost of the car between the two of us, taking over the car did not set us back too much. It was extremely convenient for us to to have this car, even for a short while, and I understand why many people would want to have a car even though they don’t absolutely need one.
However, if it is at all possible to forgo having a car while paying off student loans, I suggest that you do this. The convenience of having a car is not worth the extra expenses associated with owning or leasing a car. Nevertheless, if you absolutely need a car, there are still some things you can do to minimize the expense of having a car while paying off student loans.
One of the best ways to save money while owning a car is to buy a used vehicle. Over the course of my lifetime, I have used a number of pre-owned cars, and I never had a major issue with them (although the car I drove around in high school was so bad, it didn’t work in the rain!). So long as a used car comes with a good warranty and has been certified that it has no major issues, you should feel comfortable purchasing a used car for a fraction of the cost of a new vehicle.
Some people do not like the idea of owning a used car, since they are worried about the reliability of the vehicle they drive. Instead of buying a new car, you might consider leasing a car instead. Indeed, I decided to lease a car myself rather than purchase a new or used car. I chose to lease a car rather than buy a vehicle, since self-driving cars and electric cars will likely be more available in the next several years, and I did not want to purchase a car that could become obsolete. Also, leasing a car is generally cheaper than owning, and you usually have the option of buying a leased car at a decent price after the lease term is up.
I could write an entire article about leasing a car, but it is sufficient to say right now that you should shop around, and get ready to negotiate with people at car dealerships if you decide to lease. Be prepared to walk away from any deal you do not think is right. I Ubered to a car lot and needed a vehicle that day so I could begin moving, which was not conducive to getting the best deal! Leasing a vehicle is all about negotiating the terms, and the down payment, miles, and monthly payment should all be thoroughly discussed before agreeing to anything.
In the end, having a car while paying off student loans might take away funds that you can use to pay off student debt. As such, every student debt borrower should carefully consider if they absolutely need a vehicle. And if you must own or lease a car while paying off student loans, there are certain steps you can take in order to ensure that you spend the least amount of money possible on your vehicle.