Student? How to (finally) get a better car…

Student? How to (finally) get a better car


If you’ve had enough of the old student clunker or moved and need a car with better gas mileage to get you to uni; maybe you can trade in a geta better car.

If you don’t owe any money on your car or are at the tail end of your payments, trading in your car and getting a better one is simply a matter of going to a dealership, getting an appraisal and new loan. Things get a bit more complicated if you still owe money on your car.

Appraisals and Trade-In Value

You want to get the best price for your current vehicle since this appraisal value will go towards the amount you owe on the car. The easiest way to find out how much your car is worth is by using websites such as Edmunds or Kelley Blue Book to get a general estimate.

Bring your estimate to several car dealerships as you conduct your search. Keep in mind that the online estimate is never going to be exactly what dealers will offer you. Online appraisals cannot take the place of a physical examination of the car.

Taking on More Debt

If you owe more than your car is worth, that amount will usually be rolled into your new loan. Whether you are taking out a personal car loan or going through the dealership, financing a new car when you still owe money on your current one means taking on more debt.

If you know you’ll need to trade in your car beforehand, it’s a good idea to pay more than the minimum monthly payment and lower the principle. This way, you may have a new payment plan, but you will be taking on the least amount of debt possible.


There are a few ways to get the money for a better car and websites like MoneyExpert can help you compare various payment plans. You can take out a personal loan or a hire purchase or a personal contract purchase (PCP).

With a personal loan, you’ll still need to make monthly payments, but you will have paid for the car outright and will own it from day one. If you miss a payment, it’ll affect your credit score and your ability to get a loan next time, but you won’t have your car repossessed.

Hire Purchase or PCP

A hire purchase and a personal contract purchase are structured similarly to a loan, in that you’ll be making monthly payments for a certain period of time. For both types of payments, you’ll need to make an initial deposit on the car. You don’t own the car during the contract or loan period, which means if you miss a payment, the car can be repossessed.

You’ll need good credit in order to get these types of loans, but they are considered to be a lower risk loan (for the lender) than a personal loan.

Whatever financing plan you choose, remember that doing your research and comparing plans is the best way to get a better car and keep monthly expenses down.