College Students: What Should You Drive?

When I was in college, there were three types of people:

1. People whose parents bought them cars;
2. People who bought their own cars; and
3. People who were smart and borrowed cars from their friends.

Truthfully, if you were a #1 type of person, you probably got your insurance paid for and had a gas card too.  There were lots of folks like that at my school and obviously it's not unusual -- even starting out in high school a lot of the time. 

I was a #2 type of person.  At the start of my senior year, I paid $950 for a Honda Civic Hatchback, in a lovely two-tone red/rust color scheme.  It had a lot of miles, but the basic structure was fine, the interior had no tears or cracks, and mechanically it was unstoppable.  It needed a front-end alignment but was otherwise good to go. 

I worked part-time on campus in order to buy groceries, pay rent, and deal with car expenses.  The Honda was very fuel-efficient, and insurance was really cheap, so my ongoing costs weren't too bad.  Not until later did I realize something else important:  because I owned the car outright, I didn't have a lienholder imposing their own insurance requirements, which would have certainly increased those expenses. And the car was so old and low-value that it fell into the lowest possible registration cost bucket as well.

I used to marvel at individual students who took on a real live car payment while they were in school, when they had to pay it themselves and weren't sitting on a trust fund or parental checking account.  There is no good reason to do that.  Consider the economics:  you buy (or lease) a car, at precisely the time when your future is uncertain, your possibility of moving somewhere else where a car would be a huge pain is high, and your work schedule (and, therefore, income) is at risk of disruption if you have to put extra time into finals, or big assignments, or beer.

If you need to have a car of your own, college towns are full of cheap used cars being sold by desperate students.  Take advantage of them!  Show up with cash and you can probably work yourself a pretty good deal; chances are the seller has neither the time nor the patience to deal with a bunch of people coming at different times, so the first tangible buyer is disproportionately valuable. 



You can keep it until you get a real job and want something less crappy, or save your money and don't get hung up on the whole car-as-fashion-statement thing.  If it works, and is basically safe and reliable, keep it.  Cars are a huge sinkhole and getting started in the real world is expensive; you have to buy furniture, and stuff for your kitchen, and ridiculous televisions. 

Another advantage of the "student" car is that, if it gets a bit banged up, nobody will really care.  You don't want to file a claim on your insurance to do bodywork on an old crappy car.  You do, however, probably want to do at least an oil change and basic service.  The various drive-in shops will all get you sorted for $30 or less and it's good insurance. 

But let's return to our original list -- ask yourself, honestly, if you can manage being a #3 type of person?  Borrowing somebody else's car has some great advantages:  you have no ongoing expenses, it will only cost you a bit of gas money; if you have rich friends, they will probably have nice cars; and it will be easier for you to cajole them into coming along, and making a road trip out of whatever errand you have to do. 

The #1 people reading this may resent being taken advantage of in this way, but they have an easy out:  if you have a #3 who wants to borrow your car, you can always do the driving and take them wherever they need to go.  No questions about what happens if the #3 has an accident, or parents put down a rule about nobody else driving the car. 

Bottom line, if it's your own money, save as much of it as possible as far as vehicular expenses are concerned.  Buy something that is cheap but not a death-trap.  At this stage you might only have it a few months, so taking any kind of depreciation risk and high insurance/registration costs is pointless. 

And if your parents hooked you up, recognize how lucky you are and help out your friends when they need a ride somewhere.