By Austin Bagan
College is a magical time of exploring and growing as an individual. A major part is being able to have a sense of freedom from your parents and for yourself. Students who lease or own their transportation used for school feel a sense a freedom, but with that comes added stress.
When deciding to purchase a car as a college student you have two choices: to lease or to buy the vehicle. Both of these options come with benefits as well as drawbacks.
After discussions with multiple students who have a car payment each month while still attending school, the conclusion was astonishing. Most students who are leasing their vehicles are making monthly payments whereas others are making payments towards an end goal which is owning their vehicle. It is astonishing that more students don’t feel it’s necessary to start building their credit at a young age.
The reason most students chose to lease their vehicle is to have lower monthly payments. “The difference in price a month was almost $100 from leasing opposed to owning,” said a student who wishes to remain anonymous. “I had to make sure to pick up extra hours at work each week to make sure that I could make the payment,” that same student explained. She went from owning to leasing when the hours at her job were cut. The advantage of a lower payment drove this COC student to trade in her vehicle to lease a different one in order to keep transportation for her job and school.
While interviewing many of the students around campus, there is a remarkable trend that is being uncovered when it comes to buying or leasing a car as a college student. A COC student, Ashley Gelbard was discussing with another student that “the freedoms I have while having my own car as a college student really defines me as a person.” I asked her what the best part about leasing a car was and she seemed very excited, she answered almost immediately. “Due to my busy schedule, being able to go anywhere at any time is the best part about leasing my car. I love my car!”
The average college student works while managing school as well. Gelbard is a prime example of the average college student with a job that is as demanding as her school schedule. She works as a nanny which requires her to drive all over the city, so having her own car is essential.
After talking too many of the dealerships around the area, none of them seemed to have any college discounts or deals. When I found this out I was shocked. The reason for this is, when I talked to Gelbard she mentioned that she received a discount off of her initial down payment from the dealership she bought it from. How is this possible when no dealerships in the area offer any discounts? This information made me dig even further and I found out that a family member of hers works at a dealership and this is the reason that she received a discounted down payment.
I was able to get into contact with a family friend who worked for Ford Motor Company back in 1992, who wishes to remain anonymous. He revealed that in 1993 the company started a college student buying program, but due to complications with how the company was being run, the program was just “an idea on a white board.” The idea was a “secret” according to this employee. Upon further research, I didn’t uncover any information regarding a college buying program or any plans for one in the future.
To understand just how important having a car is in college you have to look a little deeper into a schools parking availability and student attendance each school year. “In 2015, the attendance of students was approximately 20,000 students,” said Eric Harnish, Vice President of Public Information, Advocacy and External Relations at College of the Canyons. That number is a little bit higher than the previous year. “The parking permits issued for the fall 2015 semester was 13,510.” This number was about 1,800 more than the previous fall semester, which led to an increase in the permits issued to COC students.
Sitting down with a young man, Johnathan Hernandez, gave another side to leasing rather than owning. With a lease you make payments each month and in about two to three years you can choose to lease that same vehicle again or you can choose a new vehicle. Another way is to purchase that car out right and either pay cash up front, or make payments. You can also chose to lease to own, which means you make the same payments and then at the end of the lease, you own the car out right. He chose a higher end vehicle so he wanted to be able to keep the car.
“No deals or discounts. We will try and give a student who is a first time buyer some sort of deal in order to earn their business long term,” said Fred Pelaez, Leasing and Financing Consultant for Auto Nation Chevrolet. He made a few very good points on how leasing is better than owning, especially being a college student. Like I had mentioned previously, the payments are always lower unless you are leasing a higher end car. In that case, the payments will be more expensive. The type of car an average college student can afford usually ranges in between a Honda Civic and a Toyota Corolla. The reason is because of how cheap these vehicles are to own. The base model Honda Civic, the EX model, is only $189 per month on a lease. This comes with only $1,975 due when you sign the lease. To some people that seems like a lot of money as a down payment, but some cars’ down payments can be double or even triple that. So putting up $2,000 for a down payment isn’t the biggest deal in the world. These figures can found at HondaofValencia.com.
Buying verse leasing is a tough choice that has to be made. The reasons for doing it sooner rather than later are clear. Helping decide what route you want to go is hard when going at it alone.
Make sure that you don’t get pressured into a decision without being properly informed first.