Car loans can sink students

Most students need - or think they need - a car, but taking out car loans may not be the best way of obtaining one.

"Car loans may not be such a great idea for conventional students," economics professor Dr. Richard McGrath said.

The conventional college student is fresh out of high school and just entering college for the first time.

"The biggest issue with car loans is students are generally not in great financial shape to pay money back over a number of years," McGrath said.

This may not be true of all students. However, McGrath offers advice for students who may be able to afford that loan.

"You maybe able to afford the car loan, but don't forget, auto loans require that you pay more for insurance because you are required to have more insurance on a car that was purchased with a car loan."

McGrath says students who are in good financial standing may quickly find themselves in major debt from the increased insurance on top of the loan.

"Students who need to work more to increase finances, usually sacrifice study and preparation time."

Chris Murray graduated from Armstrong this past summer and purchased his automobile a few months ago.

"I love my car, and I don't regret buying it, but it does take up a majority of my finances," he said.

Students may need cars for many reasons, but if the car is solely for getting to work, McGrath has more advice.

"If you only need a job to pay for a car, and you only need a car to get to the job, drop the job and the car and walk to school or take the bus."

McGrath said students must realize when they are falling into financial trouble. The longer a student fails to realize their debt problems, the more adverse the affect will be on their future.

"My advice to students is drive something cheap and dependable, take the bus, take a bike. There's no reason to saddle yourself with a big car loan while you're in college," he said.

Murray's experience supported McGrath's thoughts.

"I would hate to have these payments if I was still in school and I'm glad I waited until I finished," Murray said.