Don’t Get a Car Loan. Do This Instead.

By Rene Santana on October 16, 2019

Car loans only work if you have “guaranteed” future money. As college students, you already don’t have much money to your name, so how could you possibly own a car? Well, actually, I have a car loan out, and while having a newer car has been nice, it really hasn’t. While I do have the funds (thankfully) to make payments, it’s been a longterm investment that I’ve doubted since I drove it off the lot. And when I saw its first check engine light spring up, my heart sank, as did my wallet. So while I am ever grateful that I can afford to make payments, I still wonder if there were any other options I could have taken. Here’s a list of potential paths I’ve considered and I sure do hope you do as well!


Image by lena1790 from Pixabay

Car lease

Alright, this option may seem better, but in reality, it’s the lesser of the two evils. Only consider this if you know you can drive the restricted miles. If you know you drive way too much to stay below the restricted mileage, then this is not the option for you. But say you can, in which case, do it. Leasing a car will get you a new car, repairs included, and lower monthly payments. Best of all, you have the car for two years, meaning you don’t have to worry about investing any more time or money with it. Now, for those wanting to build credit or own the car, leasing is not the way to go. In fact, if you know you’re better off buying a car, then I applaud you for having that cash ready to throw down. For a quick list of pros and cons in leasing a car, check out Heather Levin’s article. As she mentions, it’s really up to preference, as which I took as you won’t be getting anything back for the investment, but you also won’t be worried about driving an old beater car.


Whether if it’s from your financial aid, your part or full-time job, or from your side gig, you should be putting some of it away in savings. There’s no better alternative to increasing your funds than investing and saving your money. You don’t need to buy a 2020 car as your next commuter ride, no matter how enticing a Tesla may be. I will even say that if you save enough money, getting a car with a down payment is possibly the better option here. So long as you can keep those monthly payments low, having a car loan isn’t too bad even when you have to take it to the shop for maintenance. The biggest problem I’ve had was that my payments were already high, so adding in repair costs put a big dent in my finances.

Use public transportation.

When they fit in your schedule, buses are amazing. You can catch up on your readings, Instagram feed, or meet new people on your way to class or work. Typically, you’ll pay about fifty dollars for a monthly ride pass, which depending on how much you normally pay for gas, can be worthwhile. The best part is you won’t worry about breaking down in the middle of the road, plus no car payments or insurance bills. It’s pretty common for colleges to have a shuttle bus for students to get around town. You can also hit the greyhound for long-distance travel. Again, depending on gas prices, it could come out the same to ride the greyhound or longer distance bus back home.


Want to befriend your work buddies? Offer to carpool. Even if you don’t have a car, you can still offer to take turns driving. And if they rather you not drive their car, then pitch in for gas so that you can ensure you’ll be good to hitch a ride to and from work. Some towns even offer carpool sign-ups for people commuting long distances. If you’re just needing to head back home, you may be able to find a ride home with classmates heading in the same direction. Of course, you’ll need a ride back so be sure to plan ahead if this is your choice of travel.

Bike or walk

Yes, I said it. Just walk to class. Bike if you’re able to! It may be one of the best, easy ways to keep yourself active between classes. But I understand if this idea may be a bit much if you’re needing to travel more than four miles somewhere. Nonetheless, if you are close to campus or to your workplace, walking or biking can significantly help improve your morning or afternoon as you’ll have time to think and wake up between shifts or classes. Having walked down to the bus stop and taken multiple walking breaks, I can attest to the newfound joy in life from not having to deal with traffic and other drivers. Plus, you could be earning some crypto-currency if you’re using a pay-to-walk app as this would be the perfect time to do so!

If all else fails…

If by the end of the day you are paying way too much to repair your put-put car, and there’s no other way to get back home to visit your family, then a car loan may be your last option. If so, all I can recommend is to do your research. Do very hardcore research. Find a car that is below ten thousand, has less than 125,000 miles, and doesn’t break down every 6 months. So don’t sweat it if you already have a car loan out. It’s okay. The best thing to do is to focus on paying it off quicker than your other loans. The best-case scenario is that you build awesome credit and sell the car while it’s still in working condition to put down for another one.

Bonus round:

If you’re a delivery driver or you do ride-hailing, then as I previously mentioned,  the best thing is to buy a car for less than five thousand and be okay with doing minor repairs until you save enough from your gigging to help cover the cost of a newer car. You’ll rack up a ton of miles with it, so make sure you’re okay with finding something a bit better than your current set of wheels, but nothing that you wouldn’t mind sending to the shop every so often.

CWU Graduate | Writer | Editor @WaldorfPress | Favors Tech, UX, and the Serial Comma.

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