Choosing a College Is-and Is Not-Like Shopping for a New Car
Last week I made an unexpected purchase. I bought a new car. My travels to schools had put a lot of wear and tear on the one that I traded in. I have been a car enthusiast most of my life, though I really hate the sales process as well as the paperwork involved in getting a new car. This time I was fortunate to work with a very good salesperson, a Rutgers grad like myself. After I came home with my purchase, I thought about how choosing a college was a lot like shopping for a car. The exercise of choosing a college versus committing to the next car is not all that different.
When you buy a new car you go into a slick-looking showroom. Bright, shiny new cars are spread throughout, usually equipped with add ons that the dealer wants you to buy. These add ons, some nice like wheel locks, some unnecessary like a chrome exhaust finisher, can raise the price of the car by more than you’d ever want to pay.
But no smart car buyer ever pays the full sticker price. Just like families who are choosing a college.
When you shop for a new car you can find price guides that tell you what the dealer pays for the car, any bonuses that the manufacturer might be offering to the dealer to help them to sell the car, and any incentives that a buyer can take advantage of to pay as little for the car as possible. You also know what the dealer pays for those add-on accessories. And you can go to the Kelly Blue Book Web site to get an estimate of the value of your car to a dealer as well as the price that you might get if you sell the car yourself. The past three times that I have bought a new car, I brought this information into the negotiations. Given the choice between selling a car and letting me walk the dealer sells the car on my terms.
Colleges refer you to “net price calculators” as well as a number called “average net price” to give prospective students and their parents some idea of what they’re likely to pay for the first year of college.
However, since college is a future purchase–the student might not be on campus for another year or two–the numbers that you will see are at best, a best guess of the price that you will pay, less incentives that the school might offer.
Colleges are sold a lot like cars. But there are some differences.
- If you want the right car and you have good credit, you can qualify for low-interest loans. Only these loans are subsidized by the auto company and they can be discharged in the event of bankruptcy.
- If you threaten to go to another dealer that offers you a better deal, then a dealership will try to match or beat their price. Or they might not. The same is true in the process of choosing a college. A college will match or beat a financial aid offer if it wants you badly enough.
- Ccar dealers and colleges will sometimes allow you to take on more debt than you should ever handle. The car dealer has the advantage. S/he can come without warning and take your car. A college will wait until after you have graduated or dropped out to go after you for the debt.
- Colleges, like car manufacturers, will offer loans that extend payments far longer than you should ever pay. You can get a 72-month or 84-month car loan, a crazy thing to do when you are financing a depreciating asset. College loans can be paid over two decades for an undergraduate degree. But the car manufacturer will not cut you a break for more than a month or two. The student loan grantors allow forbearance.
- Auto sales people, if they’re smart, know their product and they can answer your questions completely. A car is a very expensive purchase. A good sales person must instill confidence in the product as well as the dealership’s ability to support it. The same is true of a college admissions officer when it comes to choosing a college. Car dealers, like colleges, sell not only an “experience” or a “product.” They’re selling a package of services performed by people.
- Auto sales people pitch the product based on curb appeal, how good you will look in it and what your friends or neighbors might think of you for buying it. The same is true of college admissions officers in the process of helping parents and students in choosing a college. They might not care so much about what a student’s friends will think about their college choice. But they, like the auto sales people, want you to feel good and look happy about your decision.
- Unhappy faces on campus are a huge downer for admissions officers as well as the student ambassadors who give the campus tours. Same with the crowds of annoyed customers waiting in the car dealer’s service department. A good tour guide steers you around those crowds. The car dealer tries to clear out the waiting areas in the service department as well as the showroom as best they can, even if they have to feed you. So, in college admissions and auto sales customer service from other departments is a very important part of the marketing.
- Auto sales is an occupation where people do not stick around long. The place where I bought my car is an exception. The same is true for college admissions staffs. The young and energetic counselor who might have helped your older son or daughter in choosing a college three years ago has likely moved on to another job.
- The paperwork to commit to the purchase is complicated.
The major difference, of course, is that most people who need a car are likely to buy more than one or two through their lifetime. Most families commit to a college in the hope that they will need to work with only one college.
Good article! I kept thinking that the student will try to get his parents to co-sign for the loan(s).