3. Will you need to buy a car?
This is obviously a huge part of the decision. If your student already has a car available, the key financial considerations will be the cost of parking, fuel, maintenance and insurance. On the other hand, if you need to buy a car, the cost could be a major factor.
In the Kerns' case, the cost of alternative transportation meant that buying a car for Zoe made sense, from a long-term perspective. "We found something basic but reliable so we don't need to worry about her breaking down, and she can have it after she graduates," Maggie says.
4. How much is insurance?
Besides the cost of the car itself, insurance is typically the biggest expense to consider. Insurance premiums are higher for younger drivers and registering a car in a different city or state could bump up your premium.
Ask your auto insurance company about potential discounts for college students who earn good grades—that could reduce your premium significantly. Also consider defensive driving courses for your student because they can lead to lower insurance rates. You might qualify for discounts if your student already has a car, but chooses to leave it parked at home, rather than taking it to college.
5. What are the parking options—and costs?
Having a car may add an extra element of stress for students navigating college life in an unfamiliar city. It's worth checking ahead of time to find out if the university offers parking permits to undergraduates. If parking on campus isn't an option, look for secure and inexpensive long-term parking off-campus. Parking on public streets can be a hassle—frequently moving the vehicle can be time-consuming, and the cost of parking tickets can quickly add up.
6. Is your student committed to maintaining a car?
Ultimately, the truth is that having a car at college is still a privilege for most students regardless of uncertain events. Parents and students should commit to an agreement about what conditions are necessary to keep the car at school. That might mean maintaining excellent grades, covering some of the costs, or both.
The Kerns, for example, agreed to put $5,000 toward a down payment on Zoe's car and be guarantors on a loan—but Zoe is on the hook for half of the $225 monthly payment. That arrangement offers a double benefit. Zoe gets the car and, because the loan is in her name, she has the opportunity to establish good credit for life after college.
We’re confident you have all the tools you need to decide whether a car is the best way to give your student access to safe and secure transportation during college—after all, you’ve made it this far!
JPMorgan Chase Bank, N.A. Member FDIC
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