Driving Your Way to MORE College Loan Debt

Having a car during school, and having a nicer car once you have started working could be working against you and your ability to reduce your college loan debt.

A Car is NOT AN ASSET

Sure owning a car shows up as an asset on your balance sheet but really it is a depreciating asset that you will never see original value for.

Owning a car in college will add to your college loan debt because you now have at least three additional expenses. These are gas, insurance, and maintenance. These costs can add at least $100 to your college loan debt on a monthly basis.

Even if you get a car for free in college, it is still an expense that will add to your college loan debt.

Once you have left school and have started working you should still be cautious of owning a car. The question you need to ask yourself is do you really need a car to get to work and do other things. If you live in an urban setting you likely can take advantage of public transportation and close proximity to amenities. Not having a vehicle will save you a significant amount of money on a monthly basis that can be applied to your college loan debt.

But I Need a Car

If you absolutely need a car then you need to own a beater. Remember that a car is simply a means of getting from A to B. You want something small and something foreign. These cars are good on gas and will be lower on maintenance. Older cars are also insured for less because they cost less to replace. You may want to only put liability insurance on your car because the deductible will be more than replacement.

Use this transportation philosophy for as long as you can until you have paid off your college loan debt. Then once your college loan debt is paid off you can start putting that monthly payment towards a nicer vehicle. You may find that you really don’t need a nicer more expensive vehicle and the this monthly payment can go towards affording a better house.

College Loan Debt | Driving Your Way to MORE College Loan Debt