Best Car Deals for New Grads

Last Updated May 17, 2011 4:38 PM EDT

After this year's college grads hang up their cap and gown, they will be looking for a job. And in most spots in the U.S., if they are lucky (or clever) enough to find one, they will need a car to get to work.

Happily, things are improving on the job outlook. But with prices for both new and used cars rising sharply, grads will need any edge they can find to afford a reliable ride. Some new car rebates aimed directly at recent college graduates can help get purchase prices down.

Toyota, with sales lagging this year partly due to shortages resulting from the Japanese earthquake and tsunami, hopes to make up some ground with young buyers with a $1,000 rebate for recent college graduates on selected models. Ford and Hyundai also have smaller college rebates on cars that recent grads might want. Typically, these rebates are available not only for graduating seniors but for anyone who graduated from a two-or-four-year college within the last two years.

We'll look a selection of these cars. (For a set of choices for younger drivers, see Best Cars for Teens.) And if those models still seem too expensive even with rebates, we also have a selection for used cars retailing for under $15,000.

Scion xB
This boxy, funky urban car comes from the Toyota brand aimed at young buyers. In addition to being a reliable commuter vehicle, the xB has enough room to haul everything from your friends to mountain bikes when you are not working. With reasonable (though not the best) gas mileage rated at 22 mpg in city driving, 28 highway, the xB will not be a wallet-buster at the gas pump. With automatic transmission, the average selling price for the Scion Xb is about $17,670, according to Edmunds.com. With the $1,000 rebate for grads, that becomes $16,670.

Ford Fiesta
Ford's new subcompact, rated No.1 among affordable small cars in a survey of reviewers by U.S. News, comes with a $500 rebate for college grads. Reviewers like the fun driving experience and upscale cabin in the Fiesta; and its mileage ratings -- 29 mpg in city driving and 37 on the highway -- are among the best in this class.

The average selling price for the base-level S version of the Fiesta, Edmunds says, is $13,789; that's $13,289 after the $500 rebate.

Hyundai Elantra
Hyundai's has been setting trends lately with its stylish design, and the Elantra is seen by many reviewers as the best-looking small car around. Test drivers also praise its precise steering and braking, along with its comfortable interior. The Elantra is also among gas mileage leaders, with a rating of 29 mpg city, 40 highway. The Elantra carries a $400 college grad rebate; the GLS version Elantra with automatic transmission sells at an average price of $17,962 -- or $17,562 after the rebate.

In addition to those new-car choices, consider a selection of affordable, stylish and safe used cars. Even as used car prices have been rising (see Used Car Prices Surging), auto research and shopping site CarGurus.com has come up with an attractive list of used cars for grads selling for $14,000 or less.

All these models, when new, were Top Safety Picks in the crash-test ratings compiled by the Insurance Institute for Highway Safety. CarGurus also limited its picks to model with mileage ratings high enough to keep the weekly gas bill at $40 or below for someone driving 200 miles per week. The selling prices below reflect listings of cars for sale at dealerships around the country.

2006 Volkswagen Jetta
This model dates back to a time when reviewers thought that the Jetta was one of the best-driving small sedans, with a comfortable, upscale interior. (Those days are apparently over: See Consumer Reports Slams New Volkswagen Jetta.) The 2006 version has a long list of standard features and a mileage rating of 22 mpg in the city, 29 highway. CarGurus found a typical selling price of $11,300 with mileage on the odometer of 59,200.

2009 Ford Fusion
Ford's successful midsize sedan made points with reviewers for responsive, sporty handling not usually found in such sedans. Choose a 2009 model, since that was the first year of the SYNC system, which lets you give voice commands to make cell phone calls and play music from your iPod; for safety's sake, you'll also want to look for a version that includes electronic stability control. The average selling price for a Fusion S (rated 20 mpg city, 28 highway) with 44,300 miles is $14,100, CarGurus says.

2009 Mitsubishi Lancer
Though not widely known, the Lancer has been a favorite among some reviewers for its sharp styling and for its handling, considered better than average for a small sedan. And with an EPA rating of 22 mpg city, 28 highway, it will keep the gas bills down. A Lancer DE with 31,300 miles on the odometer is selling for an average of $12,900.

Whether you (or a grad you are helping) takes advantage of the special college rebates or finds a good used car, these choices should get you to work in style.

New car photos courtesy of manufacturers
Mitsubishi Lancer photo courtesy of Flickr user jonrawlinson


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    Jerry Edgerton, author of Car Shopping Made Easy, has been covering the car beat since Detroit companies dominated the U.S. market. The former car columnist for Money magazine and Washington correspondent for Business Week, Edgerton specializes in finding the best deals on wheels and offering advice on making your car last.