After donning cap and gown, you’ll need employment and, possibly, a new ride.
That college degree may have put you in some undesired debt — so how will you afford that new car now?
Fortunately, you may be able to use the “recent college grad” title attached to your name as an advantage.
There are several automakers that have car incentives and programs for graduating college students and recent college grads, including BMW, Ford, General Motors, Honda, Infiniti, Kia, Nissan and Toyota, among others.
“(Graduates) have all sorts of start-up expenses,” says Mark Kantrowitz, publisher of the FastWeb and FinAid websites. “One of the reasons why car dealerships will offer these discounts is a recognition that the ability of a recent college graduate to come up with the same sort of a down payment that one would expect from a regular purchaser is more difficult.”
With a few exceptions, most of these new-car incentives want potential buyers to have proof of employment and fit one of the following descriptions:
- Enrolled in school but within six months of graduation.
- Graduated from an accredited two- or four-year college or university during the last two years.
- Enrolled in an accredited graduate degree program.
General Motors offers undergraduates, graduate students and recent grads “preferred pricing” on their Buick, GMC and Chevrolet vehicles, says Linda Stouffer, marketing manager for GM.
“(Preferred pricing) is a set price, it’s a no-haggle price, and they know before they walk in the door what they’re going to pay for the vehicle,” Stouffer says.
The Chevrolet vehicles are more heavily promoted than Buick and GMC because they appeal to the college-age demographic. Stouffer says about 1,500 college students and recent grads take advantage of the program annually.
College discount programs typically only apply to new cars, and the savings range from $500 to $1,000. Buyers are often required to finance through the car brand’s financial service.
Kantrowitz cautions graduating students and recent grads not to overextend their amount of debt and says it may be advantageous to consider used cars as well.
“If you get a reliable car that happens to be 5 or 6 years old, you’re going to save a lot of money on the cost of the car,” Kantrowitz says. “Recall that as soon as you drive that new car off the lot, you just knocked thousands of dollars off the value of the car.”
There are two components to Toyota’s college graduate program: a $1,000 rebate that’s deducted from a car’s pricing, and financing for the car. There are credit and income requirements, but even if you’ve struggled with debt during your college years, you might still get a break, according to Toyota’s program provisions.
“If you … have experienced credit lapses, don’t give up. You may still qualify if you’ve paid off your obligations within 60 days or less of the due date and do not have charge-offs totaling more than $1,000 in the past 24 months,” according to the program.
Some of the financing benefits include one-year complimentary roadside assistance and no down payment.
Purchases through the college graduate program peak in the spring and summer, coinciding with graduation time, says Kerry Rivera, marketing and advertising manager for Toyota Financial Services. The most popular model financed through the new-car incentives program is the Corolla, followed by the Camry and RAV4.
“It’s kind of like this great milestone moment when you’ve obtained your degree and you’re entering a new life stage where you’re ready to embark on some new challenges professionally,” Rivera says.
But just how well-known are these programs for graduating students and recent grads?
Toyota Financial Services has been trying to create visibility on college campuses through advertising and other means. They also have staged essay and video contests the past few years.
“We’re definitely always trying to make some efforts to just get the word out,” Rivera says.
To prepare for a purchase under these types of programs, Kantrowitz advises buyers to save up and shop around.
He also suggests asking about other discounts before mentioning you are a recent grad and test-driving several new cars.
“It’s just like you visited the college campuses before you chose where you were going to school, you want to test drive the vehicles before you decide which type of car is for you,” Kantrowitz says.