How To Save Money For A New Car

by  |  On January 17th, 2019  |  In Tips & Guides

If you have been trying to find a way to save money for purchasing your new car, you have come to the right place. Naturally, you need to have a certain amount of money in your bank account in order for you to obtain this vehicle. However, some people have a harder time budgeting than others, but so long as you consider a few essential factors, you are well on your way to obtaining your brand-new car.

You should never purchase an automobile simply for the sake of getting one, as you need a good reason for owning it. There isn’t only a large chunk of money that you have to save for it, but there are maintenance costs to consider as well.

The very first step is to start budgeting, and this is your guide for how you can start doing this.

purchasing your new car

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Determine what you need it for

There are countless people who depend on a car as their primary means of transportation, but do you also fall into this category? Perhaps the biggest reason you don’t is because you don’t have one yet, and it could be a result of the amount of money that you need to save for it.

Still, before you begin to budget, you should make a mental checklist of whether or not you need a car, and thus whether it will benefit your lifestyle.

Budgeting based on your monthly salary

Depending on how much money you make from your day to day job, you will need to determine the appropriate budget that you can set aside for your future car. Firstly, you must contemplate what all of your necessary daily expenses are. Perhaps you have student loans and are paying monthly bills for your living accommodation.

No matter what your extra costs are, remember that those are a priority, and then you can determine just how much you can set aside for this future purchase.

Getting a loan

In addition to budgeting from your monthly pay check, you can opt to get a loan. However, this shouldn’t be your primary source for funds.

Imagine a scenario where you are close to accumulating the total amount of money that you need and decide to get a loan for the last small stretch. Regardless of whether or not you have a good line of credit, you can always learn about getting a loan from an online financial institution that does pay attention to your credit history.

Purchasing versus leasing it

Do you want to purchase or lease your car? While you will need to save less money for leasing, it also means that you have to return that particular car back at the end of the lease, unless you decide to purchase it.

However, if you save enough money to buy it off-the-bat, you will not have to worry about the contract ending. Plus, you can always opt to sell your own car years down the line as well, when you want to upgrade to a newer model.

Find your ideal car model

Choosing the right car for you can also take some time, until you find the perfect one. Once again, it is important to keep in mind how much money you are making, and how much you can even afford. If a Porsche is outside of your budget, you should not even consider it as an option.

That being said, there are so many car brands to choose from, you are bound to find one that you fall in love with and that is a reasonable price, as well.

Sticking to your goals

You have set a budget for yourself and are on route to saving, but you also need to stick to the financial goals that you set for yourself. It’s not always that easy, especially since there may be several other items that you want to purchase on a day to day basis.

Think long and hard about what you are buying, and whether or not you truly need it. For instance, do you need that expensive cup of morning coffee? The end result will be putting aside more money towards your car, so make sure to remember where it is that your priorities lie.

The cost of insurance

No matter how safe of a driver you are, yet another expense to consider is the insurance. What happens if you get into a car accident? Even if it isn’t your fault, you need the necessary insurance that can cover the cost of the damage incurred.

The last thing you want is to have to pay thousands of dollars for a car repair! After all, this can be easily avoided, so long as you also make sure to do research on finding the perfect insurance company that covers many of the potential expenses.

Consider upkeep costs

You may have purchased your car, but there is one other cost that you have to be mindful over, and that is the upkeep. Do you know how often you should change your oil? What about bringing it into the service for a check-up?

You never know when something could be wrong with your car, and you don’t even realize simply because you haven’t brought it into the shop for general maintenance. Then there’s the matter of switching your car tires depending on the season, among other considerations to keep in mind. If you want to sell your vehicle down the line, which is something that you likely will want to do, then you need to properly take care of it. Regardless, don’t you want to drive in a car that is so shiny and spotless that it turns heads?

A car can be a valuable addition to your life, but you need to determine if you truly need it. Moreover, the biggest question is, do you have the necessary funds for it? There is no reason for going into immense amounts of debt to purchase a vehicle, as you can simply find other means of transportation until you can afford this one. Plus, you can’t forget the importance of finding the proper insurance and paying for the upkeep, either.

All of these factors, grouped together, will determine the total amount of money you need to save for this particular endeavor.

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