The 3 Keys to Getting the Right Auto Loans for Student Drivers

If you are a student or the parent of a student who needs to finance a new or used car, then there's a good chance you're facing at least one of the primary challenges facing student drivers:  no credit, no job, or significant existing debt.  For lenders, this means the average college student is far from being the most enticing credit applicant, and for the students themselves, this means a more difficult time getting approved for a student auto loan at an interest rate that won't break the bank. 

Just like any academic subject, doing research is vital to the auto loan process.  That's why we're here.  Let's look at 3 key elements to maximizing the car loan process for college students:

1. Co-signer:  This is very probably the single most helpful element.  If you can secure someone with good credit to cosign your auto loan, you can not only overcome a lack of credit, you can qualify for much better auto loan rates. Without credit or a co-signer, your prospects are, honestly, rather dim.
2. Down Payment or Vehicle in Trade:  Saving up for and offering a down payment can really better the odds that you'll find a lender willing to extend you credit. What's more, it will lower your monthly payments since you'll owe less on your vehicle, having already paid off a hunk of it (sans finance fees too).  Having a vehicle to put forth in trade often works almost as well as putting money down.
3. Buying Smart:  When it comes to buying a vehicle as a student, buying smart very often equates to buying a very modest vehicle with superior gas mileage, low maintenance, and a low sticker price.  At so young an age, and with loans for tuition very often looming overhead, the very last thing you want to do is take on more debt than you can reasonably afford.  Too many students are unable to remove their "wants" from their "needs," and opt for too much vehicle, realizing only later how long and weighty is the debt they face to pay it off.

There is one more factor that makes the auto financing process all the better:  having at least a part-time job.  Lenders love to see that kind of steady income.  However, for many students, academics take priority over employment, and maintaining grades with a job that would pay enough to make it worth the while is a difficult proposition. 

When it comes to finding the right lender, we recommend starting your search online.  Instead of wasting precious study time or missing class to crisscross the town map looking for approved financing, you can apply via the web and find a lender who wants your business.  For applying online, we recommend a site specializing in your particular demographic, such as this one:  Car Loans for Students.  Additionally, if this is your first time purchasing a vehicle, it would behoove you to find an online guide for the actual car shopping experience.  We'll highlight such a resource in a future article.

We hope this information puts you behind the wheel of your financing search instead of just being along for the ride.

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