How To Save Money for a Car

Whether you want to learn how to save money for a car, whether it is a new or used car, this guide will help you how to do just that. I will share with you the best tips to get you started with saving. With these tips, you could be driving your dream car sooner than expected. So, let’s get started.

Decide what kind of car you want to buy

Take time to decide what kind of car you would like to buy. Think about whether you want a brand new car or a used one. The experience of driving a brand new car is different. New car models, the latest car engine, and modern car technology features are just a few things that may attract you from wanting to buy a new car. But they come in hefty price tags.

Otherwise, you can also consider buying a used car. You may find a vehicle that is just a couple of years old or with low mileage. Generally, light-used cars are still relatively new. They do not have issues yet that require repairs, which can be expensive.

Set a target amount

Decide the amount you will target for your car. Are you planning to pay cash? Aside from the sales price, you should also include fees and taxes. If you are planning to finance, you will target saving for the down payment. When you aim for an amount, go for a higher target so that you can have extra money to personalize your new car or give it a minor upgrade.

Separate your car money from your savings

You may have an existing savings account where you can deposit the money you save for a car. But it is best if you can separate the money for the vehicle from your regular savings. This will allow you to track how much you have saved up for your car quickly. Aside from that, your savings account is secure with the bank, and the money will also earn some interest over time. This is better than stashing your cash in a piggy bank.

Save the amount as if you own the car

When you think about how much you will save for your car, consider how much you will spend if you already own the vehicle. You will spend money on fuel, car insurance, or your car monthly payment. By considering this, you will know if you can keep the car even after you buy it. You can set up an automatic bank transfer to your car’s savings account every payday. In this way, you don’t have to worry about it, and you will learn to budget what is left on your pay.

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Eliminate unnecessary expenses

Check if you can eliminate some of your unnecessary monthly expenses. You may have memberships or subscriptions that you do not use or services you can live without. You could pay for high monthly plans, but your usage is low. This means that you are not on the right strategy. Perhaps you can call your service providers and ask for projects based on your use.

Aside from your monthly bills, you can also check on your other expenses. Maybe you can reduce the times you spend money on food deliveries, takeouts, or a Starbucks coffee. By eliminating some of these expenses, you can save more money for your car.

Look for side jobs to earn extra cash

If possible, try to find side jobs where you can earn extra cash. This is a great way to spend your free time while making money on the side. It doesn’t have to be jobs at a physical location. There are plenty of online jobs you can do in the comfort of your home. And some of them are not strict with skills and requirements, just like affiliate marketing, where you can build a residual income stream. With commitment and hard work, your income can help you save more for your car.

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Put up a garage sale

Another way to save money for a car is to put up a garage sale. You may have things that you no longer use, but they are still excellent and operational. Or something that is just collecting dust in your home. You can also ask for help from your friends and family. They may have stuff that they are willing to donate for your garage sale. If you don’t have a garage, you can still sell your new things online.

Get support from your family and friends

Let your family and friends know about your plan to buy a car to get their support. Try to ask them to contribute to your car instead of buying presents for you on your birthday or gifts for you during the holiday season. They would love to contribute and support you on your goal, especially for something more meaningful and essential to you.

Do overtime work

If your employer allows it, request overtime to earn extra pay. Let your boss and co-workers know you are trying to save up for a car and are willing to do overtime. There could be shifts where more people are needed, or your co-workers may ask you to cover changes for them. Ensure that your overtime pay goes toward your car.

Sometimes companies also run contests or competitions. Mostly, they give rewards such as gift certificates, coupons, meal stubs, etc. It is a great way to save money too. Instead of spending your lunch money, you can use the meal stub you received from winning the contest. Or you can use the coupons to save money on groceries or use the gift certificates to pay for them instead of your own money.

Keep yourself motivated

Saving money can be challenging, so it’s best to keep yourself motivated. You can use the photo of the car you plan to buy as your phone’s home screen or as the wallpaper on your desktop. So every time you look at your phone or your computer screen, they remind you of the car you want to buy.

You can also create a weekly savings goal for your car and post them on your social media. It is motivating to receive words of encouragement and congratulatory messages from your friends and family when you reach your weekly goals. Remember to thank them when you have finally reached your ultimate goal.

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Avoid temptations to spend money

If you are easily tempted to spend money, it’s best to avoid things that lead to them. Sometimes friends would invite you out to an event. If this is a paid event or there’s a chance that you will spend money on food or drinks, you might be better off skipping it, or you may regret it later on. Let your friends know that you’re saving money for a car and ask for their support and understanding. You can plan for a less lavish get-together and still have fun.

Choose the best financing option for you

If you don’t have the money to pay for a car outright, you can choose a suitable financing option and your financial capacity. Auto finance companies offer several financing terms. Some of them can pre-qualify you to the financing term of your choice to see if your loan can be approved without dinging your credit. Usually, you will have low monthly payments if you pay for a high down payment.

There are car manufacturers and dealers that offer 0% downpayment too. And if you choose zero or low downpayment, most likely, you will have a high monthly payment plus interest. On average, a car loan lasts for 69 months or around six years. You can never be sure if you will be able to keep paying for it for that long. That’s why it is essential that you carefully choose the payment term that fits your budget.

To buy or to lease a car

How To Save Money For A Car

Before you decide on how to save money on a car, think about if it’s better if you lease it. Leasing is most common in brand new vehicles. It also requires a downpayment and monthly payments. However, the amount is lower compared to the amount when you’re buying a new car. The lease term period is shorter too. Most leasing terms last for about three years. In the end, you can decide whether you will return the car or buy it.

Consider a Trade-In

If you have a vehicle that you can trade in, it can help reduce the amount of cash you need for your new car. You can trade it in through a car dealer or sell it yourself. Usually, you will earn more if you sell the vehicle yourself, but you need to put in the work and spend more of your time trying to find a buyer. You can also consult an online trade-in price guide to give you an idea of how much your trade-in is worth.

Test drive your car

Before buying your car, test drive it first. Or even if you have a lot of savings to do, the most crucial part is the experience of driving it. You can visit the car dealership that sells the car you want to buy and ask for a test drive. How does it feel like going it? If you like it, remember this feeling. You can use this as your motivation to keep saving for it.

Final Thoughts on How To Save Money For A Car

Hopefully, this guide will give you helpful ideas on how you can save money so you can purchase the car you want soon. Aside from the sense of accomplishment, you can also get into the habit of saving money. It makes you wonder what other big purchases you can achieve in the future. Good luck and enjoy your new car!

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