Leasing a car may seem like a great idea, especially for a college student eager to show their independence, but a leased vehicle can be more costly than you may think. For a college student, an auto lease only makes sense in rare instances – such as being an international student. Let's take a closer look at why car leasing for students isn't a great idea and what you can do instead.
Much Ado About Leasing
Often, leasing a vehicle seems like a good choice because you get to drive a new car for a short time without paying the full cost of the vehicle. I mean, who doesn't want to drive a new car every few years? Not to mention that while you're leasing, your monthly payment is usually much lower than it would be if you were financing.
As a college student, can you really even get a lease? Leases are typically reserved for borrowers with the best credit, so younger students may not have enough credit to meet this requirement.
If you have the credit and the income to handle a lease, there are a lot of stipulations you need to be aware of. For instance:
- Keep that vehicle clean – When you lease a car, you're expected to return it in good condition at the end. Anything over normal wear and tear is going to cost you – from dings in the door to scratches in the dash – so be aware of how you treat and keep your vehicle (sometimes easier said than done on a college campus).
- Mileage matters – Leased cars come with a set number of miles you're allowed to drive, and if you exceed them it's going to cost you – typically 25 cents per mile. Though you can pay for extra miles up front, you won't see a refund at lease end if you don't use what you paid for. As a college student, a mileage cap could put a damper on weekend road trips, or drives home to do laundry.
- Early termination fees – Deciding that a lease isn't for you might be a wise choice, but if you've already leased a vehicle, you may be stuck until your term is up. Many leases come with early termination fees which can make it hard to turn in the car early – unless you can afford the cost (which could include any remaining monthly payments).
Being aware of these stipulations and restrictions can help you decide if the positive aspects of leasing outweigh the negative.
The International Student Exception
The time leasing does make sense for a college student is when a special international student lease program is the only way you can get a vehicle. These programs exist through a few different manufacturers.
They're available to eligible international students who are currently enrolled in college, have a qualifying income, and have the appropriate international driving permit with a foreign driver's license, or a valid US driver's license. They don't require a social security number, but instead use your eligible visa for identity verification.
The programs are more commonly found from international automakers such as Volvo, Volkswagen, BMW, Toyota, and Audi. Some universities with large international enrollments may offer their own programs to help international students lease a car as well, such as Indiana University. Check with your university's office of international students to find out what your specific school offers.
Buying a Car Instead of Leasing as a Student
While your monthly payment may be slightly lower in a lease situation, when you're a student, you're much more likely to benefit from the purchase of an affordable and reliable used vehicle.
For starters, it's easier to qualify for auto financing through a subprime lender than it is to lease. This is because subprime lenders work with people in many credit situations, including low credit scores and thin credit files.
Plus, when you purchase a car, you don't have to worry about requirements like mileage caps or returning the vehicle in tip-top shape. If you still want something newer, you can opt for a certified used car. These vehicles come with many of the safety and connectivity features you may be looking for, but without the new car price tag.
Another perk of auto financing is that when you're done paying for the loan, you own the vehicle and don't have to go through the hassle of starting the process over, unlike a lease. Also, each on-time payment helps build your credit, so that you may be able to qualify for a brand new leased car upon graduating from college.
Finding the Dealership for You
The last thing you need as a college student is more stress – that includes the stress of shopping for the vehicle you need. Here at The Car Connection, we specialize in helping people get the cars they need from local special finance dealers that have the lending resources necessary to finance students with little to no credit.
Plus, you can research vehicles you're interested in with our new and used car sections. So, if you're a student in need of a vehicle, look no further that our auto loan request form to help get your journey to the car you need started today!