Buying that first car has never been more daunting

In more prosperous times, a new car was a rite of passage fo many college graduates. But the job market is gloomy for students emerging from college in late 20th-century, post-industrial America.

Buying a new car right out of school has never been a more uncertain -- and costly -- experience. Today the average cost of a new car is over $17,000; 10 years ago, it was about $10,000.


Just ask Mike Shinkevich, who graduated nearly a year ago, and who has been longing to get new wheels ever since.

He majored in accounting at South College in West Palm Beach, Fla., and works as a stockbroker in Troy, Mich. After returning to his native Detroit last year, he married his high school sweetheart, Leslie, who is expecting their first child soon.


When his wife brings up buying a new car, Mr. Shinkevich doesn't want to talk about it. Instead, he keeps driving his '88 Chevrolet Spectrum and adding to its 84,000 miles.

Mr. Shinkevich covets a Pontiac Grand Am or Ford Taurus, but the hefty "price, the financing, the intricacies, this and that" make his head spin.

And he speaks from personal experience. While in school, he worked at an Acura dealership and saw overconfident college seniors buying pricey cars and not being able to pay for them.

"Someone would get an Acura Integra and bring it back in six months after losing his job," he said. "Let's face it. When the

company gets into trouble, our jobs are the first to go."

Car companies know it's harder than ever to sell to young men and women.

For a number of years, two giant automakers, General Motors Corp. and Toyota Motor Co., have offered special deals to entice college graduates to buy.

Under GM's program, grads get $500 off any new Chevrolet, Geo, Chevy or GMC truck. They also can qualify to defer payment for 90 days. Over the last nine years, about 250,000 graduates from two- or four-year colleges, as well as current graduate students, have taken GM up on its offer, says Lynda Koskinski at General Motors Acceptance Corp.


Toyota has been running a similar program since 1987. Predictably, students usually opt for cheaper, entry-level vehicles. Half of those participating in Toyota's program bought a Tercel or Corolla. Pickups, Camrys, Paseos and Celicas shared the rest.

But what's good for GM and Toyota may not be good for the college buyer. Smart shoppers note that such purchases are financed at a higher rate.

"You pay for it in the interest rate," says Mr. Shinkevich. "Nothing's for free. Most of the deals are just enticements to get you to buy a car."

Debra Barclay, who edits Lemon Times, a newsletter for the Center for Auto Safety in Washington, says first-time car buyers should keep some basic principles in mind. Among them: Be wary of the first year of a new model. "For example, the Taurus '86 was a real lemon," she said. "But Ford got the kinks out, and now the '92 is a really good car."

Also, she advises against buying extended warranties; most car companies provide sufficient warranties. Another rip-off: rust-proofing. Some dealers frighten novice shoppers into believing that their cars will fall apart without a $300 rust-proofing.

Finally, insurance premiums can add significantly to the cost of owning a car. Young buyers already are subject to higher insurance rates -- male drivers under 25 typically pay premiums 50 percent higher than average, says Marc Rosenberg of the Insurance Information Institute, a Washington-based trade group. Choosing a sports coupe over a sedan could make an even greater difference in premiums.


Insurance companies base about 40 percent of a driver's premium on the average cost of repairing a car involved in a collision. So buying a sporty coupe that's expensive to repair might raise your premiums.


Ready to buy a first car? Here are some things to consider:

* Pay close attention to finance rates.

* Don't buy the first year of a new model.

* Don't buy unneeded options.


* Stay away from extended warranties.

* Consider insurance rates, which are affected by a model's repair records.