Starting university can be a difficult time for many reasons. New friends, a new home, new knowledge, and opportunity, and new financial responsibilities. It has become almost a running joke that being at university means you have to make every penny count. This may impact your ability to purchase a car outright, leaving you to pursue car finance options. 

As most experts will agree, using a student loan for financial obligations can be notoriously difficult. But, understanding the reasoning behind the difficulties you might face can be key in improving your chances of getting car finance as a student. Not only this, it may also make you realise that car finance is not only one option to pursue, but a very good option to pursue at that.

Why student car loans can be tricky

University is a fantastic time in your life and many people think you can live relatively responsibility-free. However, it's not all parties and lay-ins! Beyond your studies, students' inability to be financially responsible is one of the biggest reasons for unachievable car finance.

Getting any loan as a student outside of your actual student loan is doubly hard and often outright impossible. This isn’t because banks or lenders have a grudge against students, they are just acting rationally and in proportion to a student’s financial situation.

 

No income

Life as a student can often be looked at as a complete contradiction to itself. Usually, with most courses, you’re working hard every day, often more than forty hours per week and often at weekends. On top of that, there are constant tests and examinations, which put you under significant stress and mental pressure. And yet, you’re not earning any money with all of this work. Taking a full-time job is impossible, and doing significant hours at a part-time establishment can often be both physically and mentally too difficult.

So, in effect, your university years are an investment in your career and future earnings, where it will be much easier to achieve car finance and other loans. 

No track record

Theoretically, even a low income need not be an issue when it comes to loans. If you’re applying for most loans and all car finance options, it comes down to your credit rating. This gives them an impression of how reliably you’ve met your financial obligations in the past.  At 18 & 19 years old, however, often people don’t have any previous financial obligations. This once again makes it difficult for lenders and car financiers to offer good deals.

It no longer holds true that you can not get a car with a bad credit rating, however, it isn’t the end of the world. Car Finance Genie for example offers bad credit rating car finance options which can help.

So why choose car finance?

First of all, as we’ve already established, university can be quite a penny-pinching experience. There are ways to save money that you might not have thought of, which we can help you with here, but overall, it’s a challenge to save any real amount of money.

This can mean upgrading or buying a new car can be impossible to do so outright.

As many students live away from home at university, the ability to travel home when they need to is vital. This means not only having a car is a necessity, but having a reliable one too. Often, the only way to get a newer, more reliable model can be through finance options.

The next reason car finance is a great option for students is the ability to build up a credit score ready for the outside world at the end of your course. Having little to no credit score at university means you’ll also have little to no credit score once you’re outside university either.

This can delay you taking out a loan to start a business, a personal loan, or get on the property ladder as quickly as you’d like to.

Having a car finance financial obligation that you stick to while at university is a big deal and can have a seriously positive effect on your credit score. Just be careful that you can always pay the monthly contributions without any backdating or missing months, as this can have a negative effect on your credit score, putting you further behind.

Overall, car finance can often be the best way to get a new, reliable car that will help your day-to-day life by getting to lectures, going out with friends, coming home to see family, or getting to a part-time job. It can also help build up your credit score for the wider world and may well be a worthwhile investment, meaning any savings you do accumulate whilst at university don’t disappear immediately into a new petrol guzzler!